Question
Is it a bad idea to remove arbitration from my contract at a customer's request?
My customer wants to strike the arbitration clause and require disputes to be resolved by jury trial instead. I am wondering if this benefits them more than me. What should I consider?
Answer
Removing arbitration is not automatically a bad idea, but it can shift certain risks and trade-offs for your business. Court litigation, especially jury trials, tends to be more formal, public, and potentially less predictable than arbitration.
Customers may prefer jury trials because they can offer the possibility of broader remedies or a more sympathetic audience.
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...
- Compare the cost and time of arbitration vs court.
- Evaluate your risk tolerance for larger or unpredictable outcomes.
- Review whether your contract limits damages or remedies.
- 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.
At Rocket Lawyer, we follow a rigorous editorial policy to ensure every article is helpful, clear, and as accurate and up-to-date as possible. This page was created, edited and reviewed by trained editorial staff who specialize in translating complex legal topics into plain language, then reviewed by experienced Legal Pros—licensed attorneys and paralegals—to ensure legal accuracy.
Please note: This page offers general legal information, but not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.
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Disclosures
- This page offers general legal information, not legal advice tailored for your specific legal situation. Rocket Lawyer Incorporated isn't a law firm or a substitute for one. For further information on this topic, you can Ask a Legal Pro.