What Is An Arbitration Clause in Oklahoma Contracts?

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An arbitration clause is an agreement that any disputes will be settled by an arbitrator, who is a lot like a judge, in an arbitration hearing, which is like a court case. Arbitration clauses in Oklahoma contracts are very common with differing language regarding enforceability. Parties can use this kind of contract clause to settle most any type dispute that may arise between two or more parties to a contract. In business law dealings they can used to settle issues but from time to time make settlement more difficult than what it might otherwise be.

What Is Arbitration?

Arbitration is a way to resolve legal disputes without going to court. Similarities between arbitration and a court trial include:

  • A decision-maker: An arbitration hearing has a neutral decision-maker, called the arbitrator, who listens to all the evidence.
  • Arguments and evidence: The parties to the case take turns explaining facts and offering proof. Rules of evidence are usually less formal in arbitration than in court.
  • A decision: The arbitrator gives a ruling that settles all the disputed issues in the case.

The arbitration agreement dictates whether you can appeal the arbitrator’s decision to another arbitrator or even to the court. Under Oklahoma law, a court can then enter judgment on an award from the arbitration, which is equal to any other judgment that the court enforces.

Arbitration Clauses – Federal And Oklahoma Law

Under Oklahoma law, people who have agreed to arbitrate a dispute can be forced to take the case into arbitration, even if one person doesn’t want to arbitrate at the time of the dispute. A federal law, called the Federal Arbitration Act, applies to arbitration clauses in agreements that involve intrastate commerce, that is, business that reaches beyond the borders of Oklahoma.

There are a lot of situations where one side of a legal dispute didn’t want the arbitration clause in the contract but couldn’t remove it when they signed the contract. Sometimes people don’t even realize that they may have entered an agreement to arbitrate their dispute. This is common in many construction contracts. Also, many tickets or passes, whether to an event like a concert, car show, or a sports or entertainment facility like a ski resort or theme park, come with terms and conditions, including an agreement to arbitrate any injury or dispute related to the event.

What If You Don’t Want To Arbitrate?

An arbitration clause is a contract, and like any contract, there are some defenses to it, including:

  • Waiver: A party gives up the right to arbitrate in some way.
  • No consideration: Each person in a contract must give up certain things to get other things; every agreement, including agreeing to arbitrate and to give up your right to go to court with a dispute, must be supported with something in return for that promise. This giving of something of value for an agreement is called “consideration.” Generally, without consideration, no agreement is valid and enforceable.
  • Unconscionability: Every contractual relationship must have some sort of balance of negotiating power. Some parts of specific contracts that you may agree to with large, powerful corporations can be found to be unconscionable, that is, unacceptable to the court when looked at rationally since the company forced you to agree.
  • Fraud: If any part of the contract, including the arbitration clause, was based on lies or deceit by one party, then the court can nullify all or part of the agreement against the deceitful or fraudulent party.

Some agreements are not allowed to have arbitration agreements. Insurance contracts can’t have mandatory arbitration clauses, but you can agree to arbitrate your dispute if you choose to do so.

Oklahoma Arbitration Lawyer

The Tulsa business lawyers at Kania Law Office are skilled at helping Oklahomans with mediation, arbitration, and other forms of dispute resolution. For more information about arbitration, touch base with us by calling (918) 743-2233 or contacting us online.

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