What Happens If You Break an Arbitration Agreement

What Happens If You Break an Arbitration Agreement

Arbitration agreements are contracts that are signed by two or more parties to resolve legal disputes outside of the court system. These agreements are often used by companies to protect themselves against large lawsuits and to provide a faster, more efficient way of resolving disputes.

If you break an arbitration agreement, you could face serious consequences. Depending on the terms of the agreement, the consequences could be financial or legal in nature. Here are some of the potential consequences of breaking an arbitration agreement:

1. You may be liable for damages: If you break an arbitration agreement, you may be held liable for damages. This could include financial damages, such as paying for legal fees or paying a settlement to the other party.

2. You may be required to go through arbitration: If you break an arbitration agreement, the other party may seek to enforce the agreement and force you to go through arbitration. This could be costly and time-consuming, and may result in an unfavorable outcome for you.

3. You may be held in contempt of court: If you break an arbitration agreement, the other party may seek to have you held in contempt of court. This could result in fines or even jail time, depending on the severity of the offense.

4. You may damage your reputation: Breaking an arbitration agreement may also damage your reputation, particularly if you are a business owner or executive. This could lead to a loss of business and damage to your professional relationships.

In summary, breaking an arbitration agreement can have serious consequences. It is always important to carefully review and abide by the terms of any agreement that you sign. If you do find yourself in a situation where you have broken an arbitration agreement, it is important to seek legal advice and take the appropriate steps to minimize the potential consequences.