Arbitration Clause Florida Court: What Businesses Should Know
If a demand letter has reached your business and the arbitration section of your signed contract is hard to read, reach out to our team to talk through your options. Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
The Short Answer: Often Yes, but the Facts Decide
Often, yes. A valid arbitration clause in a business contract usually moves covered disputes out of court and into arbitration. Whether it does in your case depends on the facts, and the clause’s exact wording carries the most weight.
Is there a valid agreement to arbitrate? Does this dispute fall within what that agreement covers? Florida law gives the judge the job of answering both questions (Fla. Stat. § 682.02).
Many owners sign a long contract and never read the dispute section. That section can decide where a fight happens and who decides it. Read it before you respond to a demand letter or a lawsuit, not after. Ayala Law PA focuses its practice on business litigation, commercial litigation, contract disputes, shareholder disputes, construction litigation, real estate litigation, and international trade litigation.
How Florida Law Treats Arbitration Clauses
Florida law generally treats written arbitration agreements as valid and enforceable. The Florida Arbitration Code says an agreement in a record to arbitrate any existing or later dispute is valid, enforceable, and irrevocable. The exception is a ground that exists at law or in equity to revoke a contract (Fla. Stat. § 682.02).
The revised code governs agreements made on or after July 1, 2013 (Fla. Stat. § 682.013). An older clause made before July 1, 2013 followed earlier law only until June 30, 2016 (unless all parties agreed in a record to use the revised code). Beginning July 1, 2016, every agreement to arbitrate is subject to the revised code, so check the date on your contract.
Federal law can apply too. Under the Federal Arbitration Act, a written arbitration provision in a contract involving commerce is valid, irrevocable, and enforceable. The same contract defenses that apply to any contract still apply (9 U.S.C. § 2).
“Involving commerce” reaches more deals than many owners expect. Both sets of rules can matter in the same case.
How a Court Sends a Dispute to Arbitration
A party that wants arbitration usually asks the court to order it. In Florida, this request is a motion to compel arbitration. If the other side does not oppose the motion, the court must order arbitration. If it opposes, the court decides the issue quickly and orders arbitration unless it finds no enforceable agreement exists (Fla. Stat. § 682.03).
The court may not refuse to order arbitration just because the claim looks weak. Once arbitration is ordered, the court must pause the lawsuit on claims subject to arbitration. It may limit that pause to a separate claim that can be split off (Fla. Stat. § 682.03). If a proceeding involving the claim is already pending in court, the motion must be made in that court. Otherwise, the motion may be made in any court as provided in s. 682.19.
Federal court works differently. Under 9 U.S.C. § 4, when one side allegedly fails, neglects or refuses to arbitrate under a written arbitration agreement, the aggrieved party may petition a federal district court that, apart from that agreement, would have jurisdiction under title 28 over a suit arising out of the controversy. The petition asks for an order that arbitration proceed in the manner the agreement provides, and five days’ written notice of the application must be served on the party in default. A federal court hearing a suit on an arbitrable issue under a written arbitration agreement must, on application of one of the parties, stay the trial until arbitration is complete (9 U.S.C. § 3), provided the party asking for the stay is not in default in proceeding with the arbitration.
The usual sequence runs like this. One side sends a demand. The other side files suit anyway. The side that wants arbitration then files a motion asking the judge to enforce the clause and pause the case.
When a Court Can Still Hear the Dispute
A court keeps some questions even when a clause exists. Under Florida law, the court decides whether an agreement to arbitrate exists and whether a controversy is subject to it (Fla. Stat. § 682.02). An arbitrator decides certain other questions, such as whether a condition before arbitration was met, once a valid agreement exists (Fla. Stat. § 682.02).
Claims outside the clause may stay in court. A claim tied to a different contract, or to a party that never signed the clause, may not fit within it.
A party can also challenge the clause itself. Florida courts ask whether a term is unconscionable, meaning unfairly one-sided in how it was made and what it says. A court must find both procedural and substantive unconscionability, weighed together on a sliding scale (Basulto v. Hialeah Automotive). Even when a party to a court case challenges whether an agreement to arbitrate exists or whether a controversy is subject to it, arbitration may continue while the court resolves it, unless the court orders otherwise (Fla. Stat. § 682.02).
Wording matters here too.
How Litigating First Can Waive the Right to Arbitrate
A business’s own conduct after a dispute starts can affect its right to arbitrate. Courts look at what a party does, not only what the signed page says. Filing and pursuing claims on the merits in court, then asking for arbitration late, can create a problem.
Many owners answer a lawsuit by filing their own counterclaims and discovery requests. Those steps can look like a choice to use the court. Timing matters, and a fixed number of days is not a safe rule to count on.
Track every filing, letter, and request from the first day of the dispute. Write down who acted first and what each side asked for. If you plan to seek arbitration, talk with counsel before you take a step in court. That keeps your options open while you decide.
Not sure what your next step is?
Talk it through with our team — we can walk you through how a situation like yours is usually handled and what your options are.
Parts of a Dispute a Court May Keep
Some parts of a dispute may stay in court even with an arbitration clause. A business may need a quick court order to keep things from changing while arbitration runs. Whether a court can issue one turns on the clause and the case.
Multi-party disputes add complexity. A company may have signed the contract while its owner also signed personally to answer for the company’s debt, or a subcontractor may be involved without signing the same clause. Each party’s claims may land in a different forum.
Identify each claim and each party before you respond. Ask which contract each claim comes from and who signed it. That list shapes every decision that follows.
Who pays legal fees also matters. Under Florida’s general rule, each party bears its own attorneys’ fees unless a contract or statute provides otherwise (Price v. Tyler). Check your contract for any fee-shifting term before you decide how to proceed.
Reviewing Your Own Contract’s Arbitration Clause
Start by finding the arbitration section and reading it closely. Several terms change the answer:
- Who is bound: named companies, owners who signed personally, and affiliates.
- Which claims are covered: contract claims only, or any related claim.
- Where and under what rules: the location of arbitration and the rules that govern it.
- Delegation language: whether the arbitrator decides scope questions.
- Carve-outs: any right to go to court for emergency relief or other claims.
- Class or consolidation limits: whether claims can be combined.
- Opt-out terms: whether you can refuse arbitration at all.
An opt-out right exists only if the contract grants one. If it does, it must be used the way the contract says. Missing that step can cost you the option.
Florida’s court ADR resource handbook organizes state statutes and court rules on court-ordered nonbinding arbitration, voluntary binding arbitration, and court-appointed arbitrators (Florida State Courts System ADR Resource Handbook). Keep the signed contract, all amendments, and every dispute letter in one place.
Next Steps for a Business Facing a Contract Dispute
If your business received a demand letter or lawsuit, and the contract’s arbitration clause is unclear, get it reviewed promptly. Ayala Law PA represents businesses and entrepreneurs in Tampa, Hillsborough County, Brandon, Riverview, Plant City, Temple Terrace, and the wider Tampa Bay area. The firm’s office is at 1646 W Snow Ave, Tampa, Florida, and it represents businesses in Tampa and Hillsborough County. Eduardo A. Maura is the responsible lawyer for this page. Call (305) 570-2208 or request a case evaluation. Fee terms are explained directly with the firm when you make contact. No result can be promised in advance.
For the broader picture, see our guide to business contract disputes in Florida.
Frequently Asked Questions
Does an arbitration clause stop a lawsuit in Florida?
A valid clause that covers the dispute usually leads a court to order arbitration and pause the case on those claims.
Who decides whether a dispute falls under the clause?
The court decides whether an agreement to arbitrate exists and whether the controversy is subject to it.
Can a business lose the right to arbitrate?
Its conduct after a dispute starts can affect that right, so track every filing and request.
Who pays attorneys’ fees in a Florida contract dispute?
Generally each side pays its own, unless a contract or statute provides otherwise.
