A dispute clause chooses a process as well as a place.
Separate governing law, courts, arbitration, and emergency relief.
The question to ask
Identify the chosen law, forum, arbitration rules, seat, costs, and any carveouts. Check whether incorporated rules are accessible and which clause controls when documents conflict.
Illustrative clause — not a court case
Hypothetical wording: All disputes are arbitrated under rules selected by Vendor, except Vendor may sue anywhere. Consider the practical asymmetry and uncertainty.
Source and legal limits
Section 2 of the Federal Arbitration Act addresses covered written arbitration agreements with qualifications and exceptions. It does not guarantee enforceability of every dispute clause. New York choice-of-law and forum statutes contain distinct conditions and transaction thresholds.
What can go wrong
Travel, filing fees, selection rules, and one-sided court access can change the cost of a dispute. A governing-law clause alone does not necessarily select a court or resolve all mandatory-law issues.
A focused negotiation
Ask counsel to align the forum and rules, review costs and emergency remedies, and explain which claims are covered. Propose a clear mutual process rather than assuming arbitration is always cheaper or confidential.
Sources and scope
9 U.S.C. § 2 (2024 U.S. Code edition)
Covered written arbitration agreements, with statutory qualifications; fixed 2024 edition.
New York General Obligations Law § 5-1401
New York choice-of-law provisions in qualifying transactions, with exclusions.
New York General Obligations Law § 5-1402
New York forum provisions in qualifying transactions; distinct from choice of law.
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