Dispute resolution clauses—initial considerations
Dispute resolution clauses—initial considerations

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Dispute resolution clauses—initial considerations
  • Why draft dispute resolution clauses into your agreement?
  • No dispute resolution clause
  • Different types of dispute resolution clause
  • Does the clause govern the dispute?
  • Including a governing law provision
  • Including a jurisdiction provision
  • Dispute resolution clauses and limitation

Why draft dispute resolution clauses into your agreement?

When contracts are drafted, they should always contain a dispute resolution clause to assist the parties in the event that a dispute arises. A party considering commencing proceedings to resolve a contractual dispute, or who is notified of the potential of such proceedings, must always check to see if there is a dispute resolution clause in the contract and, if so, its provisions.

No dispute resolution clause

Some contracts do not contain a dispute resolution clause. This can be for a variety of reasons, eg, if the parties have drafted their own contract without legal representation. If a dispute arises and the relevant contract does not contain a dispute resolution clause:

  1. parties should try to agree the mechanism by which they will attempt to resolve their dispute, eg, mediation or arbitration

  2. if no agreement can be reached, or the process (excluding litigation) did not resolve the dispute, the default position is resolution of the dispute by litigation

Different types of dispute resolution clause

There are an array of different types of clauses, which can provide for a variety of mechanisms to resolve disputes between the parties. The most common are:

  1. litigation

  2. arbitration

  3. adjudication

  4. some other form of ADR, eg mediation

  5. tiered or multi-step procedures

Does the clause govern the dispute?

If there is a dispute resolution clause, consider whether the

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