A Dispute Resolution clause is a provision commonly included in contracts to address the process of resolving conflicts between the parties involved. This clause outlines the methods and procedures that will be followed in the event of a dispute, aiming to provide a clear and agreed-upon path for resolution.

One common approach is the inclusion of an arbitration clause, which requires the parties to submit their dispute to arbitration rather than pursuing litigation. Arbitration is an alternative method of dispute resolution where an impartial third party, the arbitrator, reviews the case and makes a binding decision. It is often faster and less expensive than going through the court system.

While arbitration is increasingly favored in many contracts, some agreements may still allow for traditional legal recourse, such as litigation in a court of law. The choice between arbitration and litigation depends on various factors, including the nature of the dispute, the preferences of the parties, and the specific contract provisions.

By including a well-drafted Dispute Resolution clause, parties can establish a clear framework for resolving conflicts, helping to streamline the process and potentially avoid prolonged and costly litigation.

Arbitration Clause Template:

“Any dispute, controversy, or claim arising out of or relating to this contract, or the breach, termination, or invalidity thereof, shall be settled by arbitration in accordance with the rules of [arbitration institution or organization]. The arbitration shall be conducted by [number of arbitrators], appointed in accordance with said rules. The place of arbitration shall be [city, country]. The language to be used in the arbitral proceedings shall be [language]. The award rendered by the arbitrator(s) shall be final and binding upon the parties and judgment upon the award may be entered in any court having jurisdiction thereof.”

Litigation Clause Templates:

“In the event of any dispute, controversy, or claim arising out of or relating to this contract, or the breach, termination, or invalidity thereof, the parties agree that any such dispute shall be resolved by filing a lawsuit in the appropriate court of [jurisdiction]. Both parties hereby submit to the exclusive jurisdiction of said courts and waive any objections to venue or personal jurisdiction. The laws of [applicable governing law] shall govern this contract and any legal proceedings arising from it.”

Or

“This contract shall be governed by and construed in accordance with the laws of [applicable governing law]. Any dispute, controversy, or claim arising out of or relating to this contract, or the breach, termination, or invalidity thereof, shall be subject to the non-exclusive jurisdiction of the courts located in [city, country]. The parties hereby submit to the personal jurisdiction of said courts and agree to waive any objections to venue or personal jurisdiction.”

Mediation Clause Template:

“In the event of any dispute, controversy, or claim arising out of or relating to this contract, or the breach, termination, or invalidity thereof, the parties agree to first attempt to resolve the dispute amicably through mediation. The mediation shall be conducted in accordance with the rules of [mediation institution or organization]. If the dispute is not resolved within [specified timeframe] from the commencement of mediation, either party may initiate binding arbitration or pursue other available legal remedies.”