MCA Arbitration Demand From the AAA
3 Decisions Before the Response Deadline

The demand did not come from a court, and that fact excuses nothing.

An owner who receives an arbitration demand from the AAA may set it aside with the funder mail, as though only a judge can create a deadline. The administrator forum moves without robes and without a courtroom, but its calendar binds just the same. Three decisions made with counsel in the first days will shape everything after: securing the record, testing the clause and calendaring the true deadlines. Owners ask whether ignoring the demand makes it vanish. It does not, and I wish that answer were different.

The Demand and the Case Record

Retain the complete demand with attachments and every piece of administrator correspondence showing the case identification. Confirm the proceeding through the administrator established communication channels rather than through a summary supplied by the creditor. Often we see the administrator notice filed without reading the clause it invokes, and the response then answers a case the owner has not verified. Identify and preserve the date and method of receipt for each respondent named.

The demand looks official. It proves nothing about authority. A curious feature of these demands is the confidence of their tone, which can suggest the forum, the amount and the timetable are all settled. None of them are settled until counsel has tested them. The company and any individual guarantor may hold different agreements and different positions, and missing a named respondent is an extremely consequential omission. Counsel needs the demand with its attachments, the correspondence showing the case number and a record of when and how each respondent received the papers. That is the record counsel needs on day one.

The Arbitration Clause in the Signed Agreement

Everything turns on the clause the owner signed. Retrieve the executed agreement with every amendment and read the provision that names the forum and describes the disputes it covers. Federal Arbitration Act section 2 makes covered written arbitration agreements enforceable as a general matter, subject to the contract law grounds on which any agreement may be revoked. That rule decides nothing about formation, about whether the clause reaches the particular claim or respondent, or about who decides a given objection (the delegation question). Clauses of this kind are drafted in order to move disputes out of court. The clause repays an extremely careful reading. Formation challenges ask whether anyone with authority agreed at all, scope fights ask whether the dispute falls inside the described class, and waiver arguments ask whether earlier court litigation already abandoned the forum.

The guarantor file deserves its own examination (the company signature binds the company, while the individual undertaking must be found in a document bearing the person signature, and funders do not always keep those papers together). A prior court proceeding over the same obligation may bear on counsel assessment of the current demand, so the litigation history belongs in the file. You received a demand, not a judgment, and the difference is everything. Arbitration clauses move the fight without ending it.

The Deadlines on the Administrator Notice

Read the administrator notice with the applicable rules, and calendar every date imposed. The rules run long, and the deadline hides inside them.

No article supplies the deadline. Only the notice does.

Deadlines in arbitration run like trains from a station the merchant never visits, posted elsewhere and departing on time. A demand opened in December carries the same deadline as one opened in June. Read and calendar every date, confirm any fee or cost requirement attached to the response and note the form the rules require. The clock runs from the notice. Some demands collapse on inspection, though the reasons vary too widely to catalogue.

The Posture After the Response

Days after receipt, the posture hardens. The options the owner preserves, or surrenders, in the first response will frame the remainder. Resist the urge to treat the administrator as a source of legal guidance, and resist the urge to call the funder before counsel has set the strategy. Any call about settlement, even briefly, can affect the claims in the case against the business. Counsel should ensure the calendar reflects the notice rather than memory. The clock does not pause for negotiation.

Delancey Street offers a free confidential initial review of business debt concerns, and a merchant facing an arbitration demand can ask whether the account is eligible for settlement assistance. The company acts as a settlement company and coordinates legal matters with independent counsel, since it is not a law firm. Consultation is where this conversation begins. Simply confirm the clause, calendar the dates and retain counsel, and ensure no response goes out without counsel approval. Proceedings reward the respondent who arrived early with papers in order.