Add mandatory arbitration

Cloud Service Agreement

What is mandatory arbitration?

When parties to a contract have a disagreement or conflict, we call that a dispute. Arbitration is a form of dispute resolution that is often administered by a private organization, as opposed to a public court system. When parties enter into a contract (like a cloud service agreement), they might agree to use arbitration to settle future disputes rather than filing lawsuits. Whether arbitration is an option for a dispute depends on state and local laws.

Mandatory arbitration describes a provision in a contract that requires both parties to agree to settle disputes using arbitration whenever possible. Organizations like JAMS and the American Arbitration Association provide arbitration services, as well as rules that govern the process (which may be agreed to explicitly in a contract with mandatory arbitration).

How is arbitration different?

Arbitration is a private process where a person or a group of people called arbitrators listen to both sides of a dispute and make a decision. It’s less formal, usually faster, and can be cheaper than going to court. Arbitration proceedings can be kept private and confidential. Despite being less formal, the decision is binding, meaning both parties have to follow it.

Litigation, on the other hand, is the traditional way of resolving disputes through the court system. It’s more formal and involves presenting the case to a judge or jury, who makes the final decision. The parties have a chance to appeal the decision if they disagree with it. Most litigation filings are publicly accessible, though some confidential portions can be redacted.

Sample langauge

Add mandatory arbitration

Replace the second sentence of Section 14.3 with: “The parties will arbitrate any dispute about this Agreement in the state or county that encompasses the Chosen Courts, in English, and agree to finally settle all such disputes according to the Rules of the Judicial Arbitration and Mediation Service (“JAMS”). To the extent the JAMS streamlined rules are available, they will apply. The arbitral decision may be enforced in any court. To the extent a claim cannot legally be arbitrated (as determined by an arbitrator), the parties will bring the suit, action, or proceeding that cannot be arbitrated in the Chosen Courts and each party irrevocably submits to the exclusive jurisdiction of the Chosen Courts.”

Written to work with the Common Paper standard Cloud Service Agreement.

What is a Cloud Service Agreement?

A Cloud Service Agreement, or CSA, is a contract used to sell cloud software and SaaS products. The CSA specifies business terms like fees and length as well as legal terms like liability and indemnification.

Master Services Agreement, or MSA, is another name for this type of contract. The main difference between them is that an MSA might be used for the sale of all kinds of products and services, from software to catering to consulting. The term CSA is more specific and narrow, while MSA is more generic and wide-ranging.

Common Paper offers a free Cloud Service Agreement that's easy to customize with the language you need.

How do you set up a Cloud Service Agreement with language on this topic in Common Paper?

Customizing a Common Paper agreement is simple. Just copy the sample launguage and paste it into the Other Changes section of your Cover Page.

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Other Changes to the Standard Terms

Additional modifications or customizations

Replace the second sentence of Section 14.3 with: “The parties will arbitrate any dispute about this Agreement in the state or county that encompasses the Chosen Courts, in English, and ...