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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


  1. 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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  2. 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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  3. 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.