AAA Launches Tool to Create ADR Clauses? BFD.

Via @TomMighell, I learned from this post on Bob Ambrogi’s LawSites that the American Arbitration Association has launched a document-assembly system for drafting arbitration and mediation provisions. Here’s how Bob describes it:

The American Arbitration Association has launched ClauseBuilder, a web-based tool designed to assist in drafting clear and effective arbitration and mediation agreements. The new tool provides parties with the AAA’s standard arbitration agreement, in addition to an array of options parties may consider when drafting ADR clauses, including specifying the number of arbitrators; arbitrator qualifications; locale provisions; governing law; the duration of arbitration proceedings; and whether to use arbitration, mediation, or both.

My reaction? I have no interest.

In 2010, I wrote this New York Law Journal article critiquing the AAA’s standard arbitration clause. Since the AAA had previously made an open call for suggested changes to the language, I thought they might find my suggestions of interest. So shortly after the article was published, and then again earlier this year, I reached out to the AAA. In each case, I received no response regarding my critique of their language. And there’s no sign that they’ve made any changes to their standard clause.

Now I’m not enough of an egomaniac to think that every organization has to pay attention to me. But it’s not a good sign that the AAA can’t be bothered to acknowledge the existence of an interested observer.

But that shouldn’t come as a surprise. Legal organizations have a way of becoming bureaucracies, and those who dwell in them have a way of becoming bureaucrats devoted to protecting the status quo and covering their asses.

So given that the AAA has shown no interest in improving the the dysfunctional language of their standard arbitration clause, I can’t recommend their document-assembly system. In fact, I can’t even be bothered to give it a spin.

By the way, here’s the AAA’s standard arbitration clause:

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

And here’s my version (it’s the one contained in my article, with “the” replacing “any such” in two places):

As the exclusive means of initiating adversarial proceedings to resolve any dispute arising out of this agreement [general language: or the subject matter of this agreement] [example of precise language: , the Supplier’s manufacture of any quantity of the Product under this agreement, or sale of any quantity of the Product by the Supplier to the Buyer under this agreement], a party may demand that the dispute be resolved by arbitration administered by the American Arbitration Association in accordance with its commercial arbitration rules, and each party hereby consents to the dispute being so resolved. Judgment on any award rendered in any such arbitration may be entered in any court having jurisdiction.

Am I suggesting that my version is infalliable? Hardly. Indeed, with two years of distance, I see some potential issues lurking.

Incidentally, Koncision’s confidentiality-agreement template allows you to include an arbitration provision, and it gives you the choice of using the AAA clause or my version. It also allows you to add some other basic components that arbitration specialists suggest you should consider including in an arbitration provision.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.