ADR Clauses
Including in a contract a clause requiring the parties to attempt to settle any dispute arising out of the contract by means of ADR is usually much easier during the negotiation phase of a contract, when parties are cooperative and they consider the chance that a dispute will arise a remote possibility. This will increase the likelihood of settling a dispute before the parties resort to court proceedings or arbitration.
An ADR clause ensures prompt and efficient dispute resolution, which is particularly important for business people, who often complain about the inefficiencies associated with going to court. In this way, parties manage the costs and risks associated with the resolution of the dispute as they do with any other costs or risks related to a business activity.
Even if the parties cannot solve the dispute through negotiation, incorporation in a contract of an ADR Center multi-phase ADR clause that includes a mediation stage effectively increases the possibility of settling a dispute before resort to court proceedings or arbitration.
Advantages of inserting an ADR clause include:
- Parties will use an efficient procedure that, unlike negotiation, would not otherwise be considered in the event a dispute arises
- Prompt resolution of the dispute
- Confidentiality cloaking the procedure and the outcome
- A risk-free procedure controlled by the parties
- Parties choose the third party neutral
Model clauses (download doc. word)
Why consider inserting a Mediation clause before resort to arbitration or court proceedings? (download pdf)
Why use ADR Center clauses? (download pdf)
How to draft an ADR clause (download pdf)
