What is the primary purpose of arbitration clauses in contracts?

The primary purpose of arbitration clauses in contracts is to take disputes out of the judicial system. Arbitration serves as an alternative dispute resolution mechanism, whereby the parties agree to submit any disputes arising from their contract to an arbitrator or a panel of arbitrators instead of pursuing litigation in court. This process can streamline conflict resolution, offering a potentially faster and less formal approach than traditional court proceedings.

Arbitration clauses encourage parties to resolve their issues in a private setting, which can maintain confidentiality and lead to less publicly accessible outcomes. By choosing arbitration, parties also typically forfeit their right to a jury trial, as disputes are resolved by an arbitrator. While arbitration can influence issues related to personal jurisdiction, its fundamental design is centered around effectively moving disputes away from courts and into a structured arbitration framework. It does not aim to create a public forum or enhance opportunities for jury trials.