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Is the Arbitration Clause (AAA) enforceable for a Developer/Consultant agreement?

New York, NY |

The contract says " Any disputes arising under this agreement shall be subtend to binding arbitration before the American Arbitration Association , in accordance with the commercial rules and regulations in effect . The parties shall share equally any AAA fees incurred by either party in connection with any dispute . Any such arbitration shall take place in NY , NY . Neither party shall enforce an alleged breach of any provision of this agreement clearly without first giving the other party written notice , clearly specifying the nature of such alleged breach , and an opportunity to cure said alleged breach within 30 days of receipt " . 1 ) Will this agreement enforce the consultant to go to AAA ? 2 ) Is there any way that one can avoid going to AAA due to its high fees and continue in small claim Court .

Attorney Answers 3

Posted

One can always attempt to bring an action instead of following the contractual provision. So long as it isn't challenged, you'll be fine in choosing another venue. That said, if the other party wishes to follow the contract requirement for submission to AAA, then in most instances the provision will be enforceable. Depending on the amount at issue, the other party might likewise feel that small claims isn't a bad option, or conversely want to keep it out of small claims.

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Posted

But the other party is trying to argue on the arbitration clause that the case should be dismissed and go to the arbitration. Defendant want this to happen because he knows that probably I won't go to AAA due to its high fees and which will be a waste of time for my suing amount which is $2,500.00 1) Is there a way that I can ask judge to give the decision even if the defendant is asking to go to AAA, as it will cost me more if I go to AAA . The contract is only signed at the last page and this clause is on the page where there is no initials/signature as some other contract do have space in each and every page. There might be a possibility that defendant has altered the paragraph to suit his needs. 2) Can I argue on that and will it help so that I do not have to go to AAA. Thanks in advance.

Asker

Posted

3) All this is an unpaid salary case. I did the work and did not got paid half of the amount. Is there any law that protects someone to get paid rather than depending on arbitration clause? Thanks in advance

Posted

An agreement may be enforced if either party does so. You can file in small claims. If the other party does not object, then the case will be heard in small claims. Good luck.

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But the other party is trying to argue on the arbitration clause that the case should be dismissed and go to the arbitration. Defendant want this to happen because he knows that probably I won't go to AAA due to its high fees and which will be a waste of time for my suing amount which is $2,500.00 1) Is there a way that I can ask judge to give the decision even if the defendant is asking to go to AAA, as it will cost me more if I go to AAA . The contract is only signed at the last page and this clause is on the page where there is no initials/signature as some other contract do have space in each and every page. There might be a possibility that defendant has altered the paragraph to suit his needs. 2) Can I argue on that and will it help so that I do not have to go to AAA. 3) All this is an unpaid salary case. I did the work and did not got paid half of the amount. Is there any law that protects someone to get paid rather than depending on arbitration clause? Thanks in advance.

Posted

The contract requires both parties to go to arbitration.
Since the expenses are split the other party may agree with you to go to small claims court.
Verify first that the amount in dispute fits within the jurisdictional limits of small claims court.
Also, depending whether you entered the contract as an individual or as a company, some states may require your company to have a lawyer to appear in court which may mean that the arbitration might end off being cheaper since you can appear without a lawyer.

No attorney client relationship is established by our answering your question and these answers are meant for purely educational purposes. We are not aware of your specific circumstances and recommend that you hire an attorney to analyze the specifics of your case and applicable law and advise you as to your rights and any time limits that may apply to you within which you must exercise your rights.

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The AAA is not responsible in deciding whether the other party is equally sharing or not. The amount is with in the small claims limit. I already filed the small claims and the defendant is gonna show up on the hearing date. Its an individual not as a company. 1) Can I get any sort of court paper stating that the other party should cooperate in sharing the fees? 2) Can I argue that the defendant did not invoke the arbitration provision and waited till the hearing date which suggests that he waived the arbitration. it is unfair that defendant asks arbitration after going through all of this to come to a small court hearing date. 3) The clause on a page where there is not initials/ signature. Can some one argue that it might have been altered to the defendants specific needs. And what if the clause is not the same for both the parties. How the court going to consider this. All the defendant want is to go to AAA so that I won't apply for arbitration as it will be costly to me than my suing amount -- $2,600.00 Thanks in advance.

Edward David Smith

Edward David Smith

Posted

If the defendant wants to go to court, then ask them to sign a paper that says that they waive the arbitration requirement and consent to the jurisdiction of the small claims court. Even better, have the same paper include an agreement to split fees. As to your questions: 1) Unless the defendant agrees, or unless there is another term of the agreement that requires fee splitting or unless there is an applicable law that requires the loser to pay the fees, the court is not going to force the defendant to split the cost. 2) The defendant can wait to the hearing to object. 3) Do you really think that the arbitration page was altered?

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Posted

Could be to the point he is benefited as the terms 'commercial rules' and not 'employment rules', which will increase the filing fees and the plaintiff will forget proceeding with AAA.

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