As stated in the Florida Arbitration Code, arbitration is a form of alternative dispute resolution (ADR) whereby a neutral third party considers the facts/arguments of a dispute and renders a decision. There are some potential advantages to arbitrating a breach of contract dispute instead of litigating it.
Though, in some cases, the contract itself will actually mandate binding arbitration instead of litigation for any dispute. Here, our Clearwater business litigation attorney highlights the key things to understand about mandatory arbitration provisions and breach of contract disputes in Florida.
What are Pre-Dispute Arbitration Provisions?
Pre-dispute arbitration provisions are a common feature in many contracts. Broadly stated, they stipulate that—in the event of a disagreement or conflict between the parties, such as a breach of contract dispute—the parties agree to resolve their differences through arbitration, rather than through litigation. As explained previously, arbitration is a form of alternative dispute resolution, a method that parties employ to avoid the traditional and potentially time-consuming court process. Arbitrators act similarly to judges—they can listen to both sides, review the evidence, and make a legally-binding decision.
Know the Law: Courts Generally Enforce Mandatory Arbitration in Florida
Will a Florida court actually uphold a mandatory arbitration clause in a breach of contract case? The answer is generally “yes”—Florida policy strongly favors upholding these provisions. Indeed, the enforceability of mutually-agreed upon arbitration clauses is supported by both Florida law and the
Federal Arbitration Act (FAA). if you enter into a contract in Florida that includes a pre-dispute arbitration provision, you should expect it to be enforced should a breach of contract issue arise.
There are Some Limited Exceptions (A Court Could Invalidate a Mandatory Arbitration Clause)
Although the law typically requires courts to enforce mandatory arbitration in Florida, some exceptions exist. Here are some of the most common grounds upon which a mandatory arbitration clause may be challenged by a party seeking to file a breach of contract lawsuit:
- Unconscionable Court: Courts may invalidate these provisions if they are deemed “unconscionable,” which essentially means they are so unfair to one party that they are against public policy.
- Ambiguous Clause: To be upheld, a mandatory arbitration clause must be clear and unambiguous, providing both parties with a definite understanding of the provision.
- Fraud or Duress: Finally, Florida courts have held that if the contract or the arbitration clause was entered into as a result of fraud, duress, or undue influence, the arbitration provision could be set aside and deemed unenforceable.
Contact Our Clearwater, FL, Business Litigation Attorney Today
At Clearwater Business Law, we are committed to protecting the rights and interests of our clients. If you have any specific questions about a mandatory arbitration clause and its enforceability in breach of a contract dispute, we are here to help. Call us at (727) 785-5100 or contact us online to set up your fully confidential, no-obligation consultation. With a legal office in Clearwater, our firm represents businesses in Pinellas County and throughout the wider region.