January 10, 2017 Practice Points

Proposed New Jersey Law Takes Aim at Mandatory Arbitration

Under the law, no company that wants to do business with the state may include a provision in any of its contracts, not just those with the state, requiring mandatory arbitration of any legal dispute

by Jeanne Schubert Barnum

Assembly Bill A-3064, which the New Jersey Assembly passed on October 20, 2016, will come up for consideration in the senate this year.  If the senate passes and the governor signs A-3064, no company that wants to do business with the state may include a provision in any of its contracts, not just those with the state, requiring mandatory arbitration of any legal dispute.

Mandatory Arbitration Clauses in New Jersey 

Many parties favor mandatory arbitration clauses because they provide certainty that disputes will be handled outside the court system, in what can be a quicker and less expensive method of resolving claims.  In addition, the parties can select arbitrators who are experts in the field of the dispute (arbitrators do not have to be attorneys or former judges, but can be engineers, architects or other professionals), which can expedite the progression of a case.

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