Q: What are dispute resolution clauses?
A: They are clauses in contracts that set out how a dispute will be dealt with.
Q: Why do they matter?
A: They give parties to a contract control over what happens if a dispute arises.
Q: Can the dispute resolution clauses be vague?
A: They can be drafted broadly so as to apply to a multitude of disputes but should not be ambiguous.
Q: What can I achieve with one?
A: You can specify which ‘forum’ you would like to use to resolve a dispute and in which country.
Q: What is a forum?
A: This is the method used to resolve a dispute and can include mediation, arbitration, adjudication or litigation.
Q: What is the benefit of having a dispute resolution clause?
A: A particular type of dispute might benefit from a specific type of dispute resolution. A dispute resolution clause provides contract parties with the option to decide themselves. In a specific industry, arbitrators with industry knowledge might be beneficial to a dispute. In other cases, mediation might be preferred to protect confidential information.
Q: What about location to resolve a dispute?
A: This can also be addressed in a contract but is better dealt with in a separate governing law clause. Parties would want some control over where any dispute is resolved, particularly if you have parties across multiple jurisdictions.
Q: Can I have more than one method of dispute resolution in such a clause?
A: Yes. Some parties choose to have one method or some may decide to provide that if one doesn’t work, another will be explored.
It is always sensible to take advice on clauses such as those dealing with dispute resolution. Treating them as standard ‘boilerplate’ clauses may lead to an unexpected outcome when a dispute arises. To contact your concerns around these clauses contact Becky at SHU Law or email email@example.com.