Is an arbitration agreement enforceable in the United States?

Yes. Under the Federal Arbitration Act (FAA), arbitration agreements are generally enforceable in the United States. The FAA establishes a strong federal policy favoring arbitration. Courts will typically compel arbitration when a valid agreement exists, unless there are grounds for revocation such as fraud, duress, or unconscionability under applicable state contract law.

What is the difference between binding and non-binding arbitration?

In binding U.S. arbitration, the arbitrator's decision is final and enforceable by an American court, with very limited grounds for appeal. In non-binding arbitration, the arbitrator issues an advisory decision that either party can reject, after which they may proceed to court litigation. Most commercial arbitration agreements in the United States use binding arbitration because it provides a definitive resolution.

What arbitration institutions are available in the US?

The most commonly used arbitration institutions in the United States include the American Arbitration Association (AAA), JAMS (formerly Judicial Arbitration and Mediation Services), and the International Chamber of Commerce (ICC) for international disputes. U.S. parties can also choose ad hoc arbitration without an administering institution, though this requires more detailed procedural provisions in the American agreement.

Can I challenge or appeal an arbitration award?

Grounds for challenging a binding arbitration award are very limited under the U.S. FAA. An American court may vacate an award only in narrow circumstances, such as corruption, fraud, evident partiality of the arbitrator, the arbitrator exceeding their powers, or procedural misconduct. United States courts generally cannot review the merits of the arbitrator's decision or overturn an award simply because they disagree with the outcome.

How are arbitration costs typically divided?

U.S. arbitration costs can be divided in several ways depending on the agreement. Common American arrangements include equal splitting of fees between the parties, the losing party paying all costs, or each party bearing its own attorney fees while splitting administrative and arbitrator fees. The arbitration agreement should specify the cost allocation method clearly to avoid disputes later in the United States.

Do I need a lawyer to create an arbitration agreement?

While you can draft a U.S. arbitration agreement without a lawyer using a template, it is advisable to have American legal counsel review the agreement, especially for complex commercial relationships or high-value disputes. An attorney can ensure the agreement complies with the Federal Arbitration Act and applicable United States state laws, and that the procedural provisions adequately protect your interests.

What disputes can be resolved through arbitration?

Most civil disputes in the United States can be resolved through arbitration, including commercial contract disputes, employment disagreements, consumer claims, construction disputes, and intellectual property conflicts. However, certain matters such as criminal cases, some American family law issues, and specific statutory claims may not be arbitrable depending on U.S. state and federal law.

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ARBITRATION AGREEMENT

United States - Effective March 1, 2026

PARTY 1

Vertex Software Inc.

1200 Market Street, Suite 800, San Francisco, CA 94103

By: +1 (415) 555-0173, legal@vertexsoftware.com

PARTY 2

DataStream Analytics LLC

500 Howard Street, Suite 400, San Francisco, CA 94105

By: +1 (415) 555-0294, contracts@datastreamanalytics.com

Effective: March 1, 2026 · Admin: AAA · Venue: San Francisco, California

Arbitrators: Three (3)

This Arbitration Agreement (this "Agreement") is entered into as of March 1, 2026, by and between Vertex Software Inc. ("Party 1") and DataStream Analytics LLC ("Party 2") (collectively, the "Parties").

RECITALS

WHEREAS, the Parties have entered into or are contemplating entering into Software Development Agreement dated January 10, 2026 (the "Underlying Agreement").

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

AGREEMENT TO ARBITRATE

The Parties agree that any and all disputes, claims, or controversies arising out of or relating to this Agreement, the Underlying Agreement, or the relationship between the Parties, whether based in contract, tort, statute, fraud, misrepresentation, or any other legal theory, shall be resolved exclusively through binding arbitration as provided herein, rather than through litigation in any court of law.

ADMINISTERING BODY AND RULES

The arbitration shall be administered by the American Arbitration Association (AAA) in accordance with its Commercial Arbitration Rules then in effect, as modified by this Agreement. Questions regarding the formation, validity, scope, enforceability, or applicability of this Agreement (including any claim that all or part of this Agreement is void or voidable) are delegated to the arbitrator, consistent with Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010).

The arbitration shall take place in San Francisco, California. The arbitration shall be conducted by Three (3) arbitrators.

WAIVER OF JURY TRIAL

BY ENTERING INTO THIS AGREEMENT, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE UNDERLYING AGREEMENT. Each Party acknowledges that this waiver is a material inducement for the other Party to enter into this Agreement.

Carve-Out for Sexual Assault and Sexual Harassment Claims. Notwithstanding the foregoing, pursuant to the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, 9 U.S.C. Sections 401-402, any dispute or claim alleging conduct constituting a sexual assault dispute or a sexual harassment dispute (as defined by that Act) that arises or accrues after March 3, 2022 shall not be subject to mandatory arbitration or the class-action waiver set forth herein, and the claimant may elect, at the claimant's sole option, to pursue such claim in a court of competent jurisdiction. This carve-out is nonwaivable.

ARBITRATOR SELECTION

The Parties shall mutually agree upon the selection of the arbitrators. If the Parties are unable to agree within thirty (30) days of the demand for arbitration, the American Arbitration Association (AAA) shall appoint the arbitrators in accordance with its applicable rules.

The arbitrators shall possess the following qualifications: Minimum 10 years of experience in technology and software disputes, member of the AAA panel of commercial arbitrators, licensed attorney in good standing.

If any arbitrator becomes unable or unwilling to serve, a replacement shall be selected using the same method described above.

ARBITRATION PROCEDURES

The arbitrator shall permit limited discovery, including the exchange of relevant documents and, at the arbitrator's discretion, a reasonable number of depositions. The scope and duration of discovery shall be determined by the arbitrator to ensure efficiency while preserving each Party's right to a fair hearing.

A pre-hearing conference shall be held within thirty (30) days of the appointment of the arbitrators to address scheduling, discovery, exchange of exhibits, identification of witnesses, and any other preliminary matters.

All hearings shall be conducted in person at the designated venue.

The language of the arbitration shall be English. All documents submitted in any other language shall be accompanied by a certified translation.

The Parties agree that the arbitration proceedings, all documents exchanged or produced, testimony, and the arbitral award shall be kept strictly confidential. Neither Party shall disclose any information relating to the arbitration to any third party without the prior written consent of the other Party, except as may be required by applicable law, regulation, or court order.

The arbitrators shall have the authority to grant interim or emergency relief, including temporary restraining orders, preliminary injunctions, and orders for the preservation of evidence. Either Party may also seek interim measures from a court of competent jurisdiction without waiving its right to arbitration.

ARBITRAL AWARD

The arbitrator shall issue a reasoned award, setting forth the findings of fact and conclusions of law upon which the award is based. The award shall be final and binding upon the Parties. Judgment upon the award may be entered in any court of competent jurisdiction. The Parties agree to waive any right to appeal the award except on the limited grounds set forth in the Federal Arbitration Act (9 U.S.C. Sections 1-16).

The arbitrator shall not have the authority to award punitive, exemplary, or treble damages. This limitation does not apply to any statutory provision that expressly provides for such damages and cannot be waived by agreement.

The Parties agree that arbitration shall be conducted on an individual basis only. Neither Party may bring or participate in any class action, collective action, representative action, or consolidated arbitration. The arbitrator shall not have the authority to combine or consolidate claims of more than one person or entity, or to preside over any form of representative or class proceeding. This class-action waiver is enforceable under the FAA pursuant to ATandT Mobility LLC v. Concepcion, 563 U.S. 333 (2011) and, in the employment context, Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). To the extent California Labor Code Section 432.6 or a representative PAGA action is at issue, the Parties acknowledge the partial preemption recognized in Viking River Cruises, Inc. v. Moriana, 142 S. Ct. 1906 (2022) and agree that individual PAGA claims shall proceed in arbitration. Nothing herein shall be construed to override the nonwaivable sexual-assault/harassment carve-out set forth in 9 U.S.C. Sections 401-402.

COSTS AND ATTORNEY'S FEES

The Parties shall share equally all costs and fees of the arbitration, including the arbitrator's fees, administrative fees, and hearing room charges.

Each Party shall bear its own attorney's fees and costs, regardless of the outcome of the arbitration.

In any employment or consumer arbitration to which California Code of Civil Procedure Sections 1281.97, 1281.98, or 1281.99 apply, the drafting Party shall pay all arbitration filing and administrative fees within the statutory deadlines; failure to do so constitutes a material breach and permits the employee or consumer to withdraw the claim from arbitration and proceed in court, consistent with Gallo v. Wood Ranch USA, Inc., 81 Cal. App. 5th 621 (2022).

MEDIATION PREREQUISITE

Before commencing arbitration, the Parties shall first attempt to resolve any dispute through good faith mediation. The mediation shall be conducted by a neutral mediator mutually agreed upon by the Parties. If the Parties cannot agree on a mediator within fifteen (15) days, the American Arbitration Association (AAA) shall appoint a mediator. If the dispute is not resolved through mediation within sixty (60) days of the initial mediation session, either Party may proceed to arbitration as provided herein. The costs of mediation shall be shared equally by the Parties.

10.

STATUTE OF LIMITATIONS

Any demand for arbitration must be made within the applicable statute of limitations under the governing law. Failure to demand arbitration within this period shall constitute an absolute bar to the institution of any proceedings and a waiver of any claim.

11.

CARVE-OUTS AND EXCEPTIONS

Notwithstanding the foregoing agreement to arbitrate, the following matters are excluded from the scope of this Agreement and may be pursued in a court of competent jurisdiction: Claims filed in small claims court with jurisdiction over the dispute, disputes relating to intellectual property ownership or infringement, applications for emergency injunctive relief to preserve the status quo pending arbitration. The exercise of any right under this section shall not constitute a waiver of the right to submit any other dispute to arbitration under this Agreement.

12.

GOVERNING LAW; FEDERAL ARBITRATION ACT

This Agreement evidences a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16 (the "FAA"), including Section 2 (enforceability of written arbitration agreements), Section 4 (petitions to compel arbitration), Section 9 (confirmation of awards), Section 10 (limited grounds for vacatur), and Section 16 (appellate jurisdiction). To the extent not preempted by the FAA, this Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of laws principles, and, where applicable, the Revised Uniform Arbitration Act (RUAA 2000) as adopted in that state (see, e.g., Cal. Code Civ. Proc. Section 1281 et seq.; N.Y. C.P.L.R. Section 7501 et seq.). The Parties acknowledge that the FAA preempts inconsistent state law under ATandT Mobility LLC v. Concepcion, 563 U.S. 333 (2011) and DIRECTV, Inc. v. Imburgia, 577 U.S. 47 (2015).

13.

SEVERABILITY; INTERLOCUTORY APPEALS

If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect. If the class action waiver provision is found to be unenforceable, then the entirety of this arbitration agreement shall be null and void, and the Parties' disputes shall be resolved in a court of competent jurisdiction. Consistent with Coinbase, Inc. v. Bielski, 599 U.S. 736 (2023), district court proceedings shall be stayed during any interlocutory appeal of an order denying a motion to compel arbitration under 9 U.S.C. Section 16(a).

14.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written. No amendment, modification, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both Parties.

15.

COUNTERPARTS

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Electronic signatures and facsimile signatures shall be deemed original signatures for all purposes.

IN WITNESS WHEREOF, the Parties hereto have executed this Arbitration Agreement as of the Effective Date first written above.

PARTY 1

Vertex Software Inc.

Date: ____________________

PARTY 2

DataStream Analytics LLC

Date: ____________________

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What Is an Arbitration Agreement?

An arbitration agreement is a legally binding contract in which two or more parties agree to resolve their disputes through private arbitration rather than through the public court system. By signing this agreement, the parties commit to submitting any covered disputes to one or more neutral arbitrators whose decision is typically final and enforceable.

Arbitration is widely used across commercial, employment, consumer, and construction contexts in the United States. It offers several advantages over traditional American litigation, including faster resolution times, lower costs, greater privacy, and the ability to select arbitrators with relevant subject-matter expertise. The Federal Arbitration Act (FAA) provides a strong U.S. federal policy favoring the enforcement of arbitration agreements.

A well-drafted U.S. arbitration agreement clearly defines the scope of disputes covered, the arbitration institution and rules that will apply, how arbitrators are selected, where hearings take place, and how costs are allocated. These provisions prevent procedural disagreements from arising if and when a dispute occurs, ensuring a smoother and more predictable resolution process for all American parties involved.

What's Covered in This Template

Doxuno's arbitration agreement template includes all essential provisions needed to establish a comprehensive binding arbitration framework. Each section can be customized to fit your specific relationship and dispute resolution needs.

Party Identification

Scope of Arbitration

Administering Body

Arbitration Rules

Arbitrator Selection

Venue and Seat

Discovery Procedures

Hearing Format

Confidentiality

Award Terms

Cost Allocation

Governing Law

How to Create an Arbitration Agreement

Drafting a binding arbitration agreement requires careful consideration of procedural rules, institutional selection, and cost provisions. Our template walks you through each section so you can create a comprehensive agreement tailored to your specific needs.

1
Identify the Parties
Enter the full legal names and contact information for both parties entering the arbitration agreement. Include mailing addresses, phone numbers, and email addresses. If a party is a business entity, use the official registered name as it appears in formation documents.
2
Define the Scope of Arbitration
Decide whether all disputes between the parties will be subject to arbitration or only specific categories. Set the effective date and, if applicable, reference the underlying agreement this arbitration clause relates to, such as an employment contract or service agreement.
3
Select the Administering Body and Rules
Choose an arbitration institution such as the AAA, JAMS, or ICC, or opt for ad hoc arbitration. Select the applicable set of rules (Commercial, Employment, Consumer, or Construction) and specify the city and state where hearings will take place.
4
Configure Arbitrator Selection and Procedures
Determine how arbitrators will be chosen: mutual agreement, appointment by the institution, or the strike method. Set the number of arbitrators, any required qualifications, discovery limits, hearing format preferences, language, and confidentiality requirements.
5
Establish Award Terms and Cost Allocation
Specify the type of award the arbitrator will issue (standard, reasoned, or detailed), any monetary caps or limitations on damages, and how arbitration costs and attorney fees will be divided. Review the complete agreement with legal counsel before both parties sign.

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Legal Considerations for US Arbitration Agreements

Arbitration agreements are governed by a combination of federal and state law in the United States. Understanding the legal framework helps ensure your agreement is enforceable and that the arbitration process will proceed as intended.

This template is provided for informational purposes and does not constitute legal advice. For complex commercial relationships or high-value disputes, consult a licensed attorney in your jurisdiction before finalizing the agreement.

Reviewed by legal professionals. The content on this page and the template clauses have been reviewed by licensed attorneys in the United States to ensure accuracy and legal soundness for standard arbitration scenarios.

The Federal Arbitration Act (FAA)

The FAA, enacted in 1925, establishes a strong federal policy favoring the enforcement of arbitration agreements. Under the FAA, courts must compel arbitration when a valid written agreement exists, and they can only refuse enforcement on narrow grounds such as fraud, duress, or unconscionability. The FAA applies to contracts involving interstate commerce, which covers most commercial agreements.

State Arbitration Laws

In addition to the FAA, each U.S. state has its own arbitration statutes. Many American states have adopted the Revised Uniform Arbitration Act (RUAA) or similar legislation. State law governs procedural aspects not covered by the FAA, including rules about the form of the agreement, specific disclosure requirements, and certain consumer or employment protections. Your United States agreement should specify the governing state law.

Enforceability and Judicial Review

U.S. arbitration awards issued under a valid agreement are generally enforceable in American courts under the FAA. Grounds for vacating an award are very limited and include corruption, fraud, evident partiality, the arbitrator exceeding their authority, or procedural misconduct. Courts typically cannot overturn an award based on errors of law or fact, making arbitration a final and binding resolution mechanism in the United States.

Frequently Asked Questions

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