When a dispute over an unpaid invoice or IP rights escalates, you’ll find yourself in either Litigation (Court) or Arbitration (Private Judge).
1. Litigation (The Public Option)
This is standard court. It is often slower but gives you the right to appeal. For small amounts, Small Claims Court is the most cost-effective path.
2. Arbitration (The Private Option)
Many corporate contracts force you into Mandatory Arbitration. It is faster and private, but it can be very expensive because you have to pay for the "Judge's" time yourself.
3. The Verdict
For solo freelancers, Litigation in Small Claims Court is usually better. If a client puts an "Arbitration" clause in your contract, use our AI Scanner to check if they are also forcing you to pay for their legal fees.
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Frequently Asked Questions (FAQ)
Can I opt-out of an arbitration clause?
Only before you sign. Once signed, it is usually binding. This is why you must scan every agreement for the word "Arbitration."
Is arbitration's privacy a good thing?
For the client, yes (it hides their bad behavior). For you, it might be bad because you can't use the threat of a "Public Lawsuit" as leverage to get paid.
What is 'Mediation'?
Mediation is a non-binding meeting to try and settle before going to arbitration or court. It is almost always the best first step.