Back to Arbitration Clause

Drafting Notes

Optional provisions and considerations you may wish to add to any of the DecisionLayer arbitration clauses.

1. Prevailing Party Fee-Shifting

The default clauses do not include “prevailing party” fee-shifting language. Fee-shifting allows the winning party to recover its reasonable attorneys’ fees, expenses, and costs from the losing party. Consider whether to add this provision as a separate clause based on your specific needs:

  • Add fee-shifting: Fee-shifting can deter frivolous claims and encourage early settlement, as both parties face the risk of paying the other side’s fees if they lose. If desired, add fee-shifting as a standalone clause separate from the arbitration provision. This language may be used:

The non-prevailing party in any such dispute will pay the prevailing party its reasonable attorneys’ fees, expenses, and other costs incurred in connection with such dispute.

  • No fee-shifting (current default): Without fee-shifting, each party bears its own costs regardless of outcome (the “American Rule”). This may be preferable if you want to reduce litigation risk exposure or encourage parties to pursue legitimate claims without fear of fee liability.

2. Arbitration Carve-Outs

You may wish to carve out certain subject matters from arbitration and reserve them for court litigation, or expressly confirm they are subject to DecisionLayer arbitration:

  • Common carve-outs for court jurisdiction: Intellectual property disputes (patent, trademark, copyright infringement), confidentiality and trade secret enforcement, requests for injunctive or equitable relief, and collection actions for undisputed amounts.
  • Express inclusion in arbitration: Alternatively, you can expressly confirm that IP, confidentiality, or other sensitive matters are subject to DecisionLayer arbitration if you prefer a single forum for all disputes.

3. Amount-in-Controversy Threshold

The Tiered Dispute Resolution clause uses a $100,000 threshold by default. You can adjust this threshold higher or lower based on your preferences. A lower threshold (e.g., $50,000) sends more disputes to arbitration; a higher threshold (e.g., $250,000) reserves more disputes for court.