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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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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