WHY YOU SHOULD ALWAYS INCLUDE AN ARBITRATION CLAUSE IN A CONTRACT DOCUMENT

An arbitration clause is a provision in a contract that requires the parties to resolve any disputes that may arise through arbitration rather than through court litigation. The act defines an Arbitration as, a procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute. (Arbitration Act 1995).

It is important that when parties are drafting, negotiation or to always include a Dispute resolution method clause in the document, there are several Dispute resolution methods, Arbitration being at the core of them all. Here are some reasons why you may need to have an arbitration clause in every agreement:

1. Faster and Less Expensive Dispute Resolution: Arbitration is typically faster, less formal, and less expensive than court litigation. With an arbitration clause, the parties agree to avoid the expense and delay associated with court litigation.
2. Expertise and Neutrality: The parties can select an arbitrator with expertise and experience in the subject matter of the dispute, which can lead to a more informed and neutral resolution.
3. Privacy: Arbitration proceedings are generally private and confidential, which can be beneficial if the dispute involves sensitive or proprietary information.
4. Enforceability: Arbitration awards are generally easier to enforce than court judgments. If the losing party refuses to comply with the decision, the winning party can obtain a court order to compel compliance.

In conclusion, including an arbitration clause in every agreement can provide benefits such as faster and less expensive dispute resolution, expertise and neutrality, privacy, and enforceability. However, it is important to consult with legal counsel to ensure that an arbitration clause is appropriate for your specific situation.

How can we assist?

The success of a business is pegged on how well it protects itself from loss and harm arising from contractual relationships. Such loss and harm is prevented or reduced by having an understanding of how contracts/agreements are drafted and negotiated. At Netsheria International, we offer a wide scope of legal documents and legal to meet the requirements for different businesses. For more information, kindly visit our website or contact us via email.

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4 Key Tips for negotiating an Unsecured Loan Agreement.

An unsecured loan can simply be defined as a loan where the borrower does not put any collateral or security in exchange of the loan sum advancement. The loan in most cases is advanced by the creditor on the strength of the individual’s/entity’s creditworthiness. Examples of unsecured personal loans include; credit cards, mobile lending apps or student loans.

Unsecured personal loans can offer much needed alternative to the rigorous bureaucratic procedures of obtaining secured loans from banks and offer credit lines to low-income households, but due to their nature borrowers have to be alert to various issues before entering into unsecured loan agreements.

High Interest Rates.

Unsecured loans are characterized by exorbitant interest rates. The desperation of most borrowers looking for quick advancements invites lenders to charge such interests rates. Accordingly, borrowers should enquire from various unsecured lenders and seek to engage the lenders with the lowest rates.

Precomputed interest rates vs Simple interest rates.

Precomputed interest basically calculates your interest using the original payment schedule, regardless of how much of the loan you have really paid off. While simple interest calculates the  interest from the loan amount due at the particular time.

Evidently, borrowers should be inclined to engage with lenders charging simple interest vis a vis precomputed interest rates.

 Respite period.

Borrowers should insist on the lender granting an adequate respite period before mandating repayment. Such a period would allow the borrower enough time from the date of disbursement to allow for consistent pay offs of the loaned sum.

Engage legal professionals.

Borrowers should engage legal professionals with expertise on the subject to ensure the potential risks or loopholes in the terms and conditions are apparent and disclosed prior to entering the agreement.

In conclusion while unsecured loan agreements serve as a resourceful way of obtaining credit borrowers ought to be aware of the risks associated with unsecured loans before entering into them.

How can we assist you?

At Netsheria International, we have an experienced team of lawyers who can offer you legal assistance in capital raising for your business. We provide you with the largest collection of business documents and agreements at affordable costs. Please contact us for our services via email  or visit our website for more information.

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