Arbitration Agreement: Nature and Implications

Abstract

Today, humanity has passed the stage of trade by barter. The difficulties of the barter system led to the monetization of the economy. Goods and services are now measured in monetary terms, so that the presence of money-a unit of account, separated the act of buying from the act of selling, and with money, consumption can be spread more evenly over time. Money therefore became a medium of exchange, so that a market participant who had oranges to sell for example, would first of all convert the oranges into a means of payment which will then serve as a means of exchange in the purchase of, say yams. From the money economy, the economy developed to the credit stage or the credit economy. This credit economy enabled one to buy and later make payments. No doubt, this in most cases necessitated contract or agreement which may be written or oral. Apart from purchase of goods, services are also purchased or exchanged. An engineer could be engaged to build a house for his client and to be paid at a later stage or after the completion of certain stage of the building or all of it. Since tide and time affect events in different ways which may be beneficial to one party and not beneficial to the other, there will arise a dispute. The dispute or difference may arise because the engineer did not build as agreed or according to specifications or that the person who engaged him could not pay him as agreed. This will necessitate settlement of the dispute either in the court of Law or any other dispute resolution medium.