Overview of Dispute Resolution Agreement

What is this document?

‘Dispute resolution’ refers to the process by which disputes are to be resolved between parties to an agreement. The two basic approaches to resolving disputes are the court system, and mediation/arbitration. Mediation and arbitration are often referred to as ‘alternative dispute resolution’ (ADR) because they offer an alternative to the courts, and most ‘dispute resolution’ clauses deal with mediation and arbitration. The dispute resolution process can be included as a clause in an agreement, or it can be drafted as a stand-alone agreement, or a schedule to an agreement.

 

When would I use this document?

Since the potential for a dispute can arise in the context of any contract, dispute resolution clauses are found in a wide range of agreements. If the parties want to use mediation or arbitration a formal dispute resolution process should be included in the agreement. Where parties to an agreement are not located in the same jurisdiction (eg. different countries) international arbitration may be chosen rather than the courts of either party’s jurisdiction.

 

Who signs this document?

A dispute resolution agreement is signed between the parties to the contract.

Dispute resolution agreements can be used to resolve issues between members of the same organization, between different organizations, between individuals and the governments, and among many other parties.

 

More details about this document

Parties can choose the methods and time frames for resolving disputes. Some parties choose to provide for an informal process of resolving disputes before involving a judge or an arbitrator. These dispute resolution clauses could include mediation, negotiation, or conciliation. If arbitration is chosen rather than the courts, the document will include basic rules and timeframes for triggering the arbitration process.

 

What are the core elements of this document?

The core elements include: Governing Law, Informal Discussions/Negotiation, Notice of Formal Negotiation / Mediation, Notice of Arbitration, Rules of arbitration, Selection of Arbitrator/Number of arbitrators, Venue (forum or seat) of arbitration or litigation, Time to render decision, Appeal process, Award, Cost of Dispute Resolution, Enforceability. These elements can be included in detail, or included by referring to a set of arbitration rules or applicable legislation.

Some additional clauses that may be included in a dispute resolution agreement include processes for managing large and complex cases (knowledge and training of arbitrators), clauses for specific contexts (employment, construction, international business, etc.), specifying selection process of arbitrators and any special qualifications, and determining the preferred language to be used between multilingual parties.

 

Related Documents

Agreement to Mediate – This document is an agreement of understanding between parties who are agreeing to use mediation to settle a dispute.  

Notice of Mediation – This document is a notice to both parties involved in a dispute that a mandatory mediation session will be occurring at a certain time and place.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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