What’s In YOUR Dispute Resolution Clause?

Ok, so you’re a business doing business with another business and you need a solid contract in place to hold those potentially untrustworthy partners’ feet to the flame and make sure you get exactly what you’re expecting on this deal. Sound accurate? Did you know that many business contracts have a dispute resolution section built right into them to guide the process if (and when) things go south?

Washington-based attorney Joe Jones recently provided some insight on drafting dispute resolution clauses in supply chain contracts. He says, “the dispute resolution clause doesn’t get much respect in many supply contracts. It is usually found close to the end, far beyond the point where the average reader stops paying attention.”  Ahhh so true.

Jones offers up six practical ways that the dispute resolution clause can make an impact:

  1. Avoiding a useless judgment.  Make sure it’s enforceable and in the right jurisdiction — U.S. vs foreign, etc.
  2. Keeping things quiet (or public). Depending on your level of corporate shyness, this can be REALLY important.
  3. Full discovery, limited discovery, or none?  And how are we limiting this by arbitration?
  4. Slowing things down (or speeding them up).  Some contracts call for matters to escalated to senior execs who may or may not be busy on the back nine.  Understanding how quickly we want things resolved up front can be important.
  5. Providing options (or taking them away). Dispute resolution clauses may provide for “exclusive” jurisdiction, stipulating a single agreed venue for all disputes.  Always good to have options.
  6. Choosing the language. Seems obvious, but courts almost always conduct proceedings in the official language of their country’s legal system. Arbitration, on the other hand, can often be conducted in any language. If you have a cross-border contract, good to know what language we’re speaking while doing battle.

Some good tips there, but the big lesson here is be sure you’ve really looked at the details in those dispute resolution clauses. Dean Sperling is a great resource for dotting the appropriate i’s and crossing the appropriate t’s on your contracts to make sure YOUR matter is always resolved with YOUR best interests in mind.

More on the Case:

Six Ways Dispute Resolution Clauses Impact Supply Chain Contracts