An ELA stands for "Economical Litigation Agreement", or sometimes referred to as a "litigation prenup." It is a clause that is included instead of a conventional arbitration clause in a business contract to reduce the costs and delay of discovery. The ELA is a hybrid of arbitration and litigation that replaces the infinite discovery process of conventional litigation with a finite process of discovery based on a discovery contract, which is proportionate to the size of the controversy, and enforced by an ELA arbitrator.
The ELA model contract clause is included in the underlying contract instead of a conventional arbitration clause. The clause incorporates by reference the detailed Economical Litigation Agreement that is published on the CPR website. It is not necessary, or desirable, to append the full ELA agreement to the underlying contract.
Federal Rule of Civil Procedure 29, and most state civil rules that parallel the federal rules, provides that the parties can stipulate to alternative discovery procedures instead of the conventional procedures described in the rules. The ELA is an agreement that stipulates to discovery process as part of the underlying transaction. The legal basis of the ELA is the parties' power to contract.
The ELA is a contract that includes an arbitration clause. In the case of an ELA, the contract prescribes discovery process and the arbitrator enforces the discovery contract, issuing binding awards like any arbitration. The ELA arbitrator also has the power to award damages in the event any party violates their discovery agreement