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Colorado Arbitration Agreements

May 22, 2013

 

Arbitration has become an increasingly popular method for businesses to resolve their disputes without having to go through litigation.  Arbitration can be used in a wide array of legal disputes involving: business contracts, employment agreements, real estate contracts, collections, lending, international transactions, and franchises, among others.  Both Federal and Colorado law incorporate strong policies favoring arbitration and requiring the enforcement of arbitration agreements.  Alternative dispute resolution mechanisms, like arbitration, are favored by the Colorado courts as convenient, efficient alternatives to litigation. 

Arbitration is a method of resolving disputes by voluntarily submitting the disagreement to an arbitration panel, usually made up of one or three neutral arbitrators, for their final and binding decision.  Much like judges, the arbitrators hear arguments from both sides, review evidence, and conduct a hearing.  After both sides have pled their case, the arbitrators then make a ruling and issue an award. The arbitration panel’s final award is usually not appealable and is enforced through the court system. 

Often times arbitration is less expensive than litigation.  It also can allow parties to resolve a dispute promptly and privately.  However, arbitration does not occur by default, it can only take place if both parties expressly agree to do so.  Oftentimes parties incorporate an arbitration clause into their contracts.  An arbitration clause can provide businesses with certainty over how future disputes will be resolved and ensure that they won’t have to litigate in court.  There are a number of recognized arbitration organizations: American Arbitration Association, International Centre for Dispute Resolution, JAMS, JAG, and the International Chamber of Commerce.  Arbitration clauses are recognized, favored, and enforced by Colorado law. 

A well drafted arbitration clause should describe the types of controversies that must be arbitrated, how an arbitration can be initiated, the procedures and rules governing the arbitration, the choice of applicable law, the location for the arbitration, how costs will be allocated between the parties, and whether or not an award may be appealed.  Depending on the business, commercial transaction, location, and/or situation, arbitration may be an advantageous, cost effective method for resolving a dispute.  The attorneys at Mallon & Lonnquist, LLC have experience drafting arbitration provisions for business owners covering an extensive array of legal considerations in: business contracts, financial transactions, real estate deals, employment contracts, independent contractor agreements, franchises, and international contracts.  We also regularly represent our clients in arbitration hearings. 

Mallon & Lonnquist, LLC, is a business, finance, real estate, and litigation law firm. Craig T. Watrous is a Colorado business and real estate litigation attorney with Mallon & Lonnquist, based in Denver, Colorado. Craig regularly represents businesses and individuals in disputes from pre-filing through trial and can be reached at cwatrous@mallon-lonnquist.com.  



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