Is it a bad idea to remove arbitration from my contract at a customer's request?

How does arbitration compare to jury trials?

Arbitration is often faster and more private, with a more streamlined process. However, it is not always cheaper—filing fees, administrative costs (such as AAA or JAMS), and arbitrator fees can be significant, particularly in larger disputes.

Arbitration also typically limits discovery. This can reduce time and cost, but it may help or hurt depending on your position and how much information you need from the other party.

Jury trials, by contrast, are public and can take much longer. They involve more extensive procedures and place decision-making in the hands of a jury rather than a neutral arbitrator.

What risks increase if you remove arbitration?

Without arbitration, disputes may become more time-consuming and procedurally complex. Court cases often involve broader discovery, more motion practice, and the possibility of appeals, which can extend the dispute.

There may also be greater variability in outcomes, including the potential for higher damage awards in some cases.

What to do next...

1. Compare the cost and time of arbitration vs court.
2. Evaluate your risk tolerance for larger or unpredictable outcomes.
3. Review whether your contract limits damages or remedies.
4. Consider negotiating a balanced dispute clause instead of removing arbitration entirely.

What to consider in your specific situation

The right choice depends on your business model and risk exposure.

• The size and type of disputes you expect.
• Your ability to handle long and costly litigation.
• Whether privacy is important for your business.
• The potential for higher damages in court.
• The customer's leverage and negotiating power.
• The overall balance of the contract terms.

Changing dispute terms can significantly impact your risk, so it's worth weighing both sides carefully. Since every situation is different, consider more information through Rocket Copilot, a Legal Pro, or a legal document review to move forward with confidence.