Dispute Resolution Clauses


Commercial contracts can plan for disputes under the agreement. Such clauses are called dispute resolution clauses. Dispute resolution clauses may provide for without prejudice meetings, escalation of disputes within management, mediation, mediation/arbitration, or arbitration.

Well-drafted dispute resolution clauses will show the reasons the parties have turned their minds to dispute resolution. Do they want disputes to remain confidential? Do they want disputes resolved in a timely and cost-effective manner? Do they want a particular person or type of professional with some particular expertise to act as mediator or arbitrator?

Well-drafted dispute resolution clauses will also show that the parties have turned their minds to what procedural rules and timelines suit their anticipated disputes, keeping in mind the purposes of the clause they agreed to.

Whenever your business is entering into a contract of any kind, you may want to consider adding a dispute resolution clause to the terms of the contract. It can save you a lot of time and money later on if a dispute arises between the parties to the contract.