(b) If there is a substantial bona fide dispute as to whether an agreement to arbitrate exists, the court shall try the issue promptly and summarily. When you sign a contract that contains an arbitration clause, you agree to arbitrate disputes arising out of the contract with the other party to the contract.Arbitration is a more formal process than mediation and can be either binding or nonbinding, depending on the agreement of the parties. Arbitration replaces court action in disputes between the employee and the employer. Arbitration replaces court action in disputes between the employee and the employer. Manufactured out of state).