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Construction law: Effective arbitration clauses for your contract

Arbitration is not just a good alternative to traditional litigation in construction law disputes; it is often a mandatory requirement in Louisiana. Many business owners involved in building a new office or headquarters do not plan for an arbitrated solution. As such, they may not have an arbitration clause in their construction contracts. These clauses are essential for both sides in a construction law dispute.

Those who have not yet experienced a contract or other commercial dispute have time to add arbitration clauses to their contracts. In the interests of helping business owners in the Baton Rouge area, the following section contains several examples of effective arbitration clauses.

  • Who can arbitrate: This clause decides if one party or both parties get to determine if arbitration is necessary.
  • When to arbitrate: Without a clause detailing when arbitration should occur (as close to the time of dispute as possible), wronged parties might have to wait until the completion of the project to seek a solution.
  • How to arbitrate: Adding this clause to your construction contract allows you or the other parties to choose a forum for arbitration. Examples of such forums include the American Arbitration Association and the Judicial Arbitration and Mediation Service. The right forum might make a difference in the outcome of your arbitration attempts.
  • If a court can review the arbitration: Adding an option for a court review can ensure that the results of arbitration comply with the state's substantive construction law elements.

If you need assistance drafting or rewriting construction law contracts to include the appropriate clauses, please consult with an attorney. This has the added benefit of ensuring that your construction contracts provide you and your business with sound legal protections.

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