Arbitration is a private, out-of-court dispute resolution process—usually between parties to a contract—in which the dispute is resolved by one or more arbitrators rather than by judges and juries in the court system. Businesses often include an arbitration provision in the dispute resolution section of online agreements (terms of use) for consumer products and services.
In Indiana, arbitration is governed by both federal and state laws. The Federal Arbitration Act (FAA) applies to arbitration agreements that involve interstate commerce, which can include online agreements for consumer products and services. Under the FAA, arbitration clauses are generally enforceable, and courts must enforce private arbitration agreements according to their terms. Indiana has also adopted the Uniform Arbitration Act, codified in Indiana Code Title 34, Article 57, which provides the framework for conducting arbitrations that are not covered by the FAA. This state law outlines the procedures for initiating arbitration, selecting arbitrators, and the enforcement of arbitration awards. Businesses in Indiana often include arbitration provisions in their online agreements to ensure that disputes are resolved in a private, less formal setting than a court, and these provisions are typically upheld by courts as long as they are not unconscionable or entered into under duress.