BREACH OF CONTRACT AND COMMERCIAL CONFLICTS: THE VALUE OF THE DISPUTE RESOLUTION CLAUSE
Court-annexed arbitral programmes in disparate docket-clogged areas, investor-state dispute settlement in national treaties, company-promulgated employment programmes requiring arbitration of employer-employee disputes, mass arbitration of business disputes with consumers in a multitude of product and service agreements: the types of dispute resolution processes, specifically arbitration, and the varied practice areas in which they are used, continue to expand.
What has not changed is that the foundation of the arbitration process continues to be the dispute resolution clauses of individual business-to-business (B2B) contracts. These contracts have helped to create, advance and grow the services of institutions like the American Arbitration Association (AAA), and its international division, the International Centre for Dispute Resolution (ICDR), to help companies prepare for and settle disputes.
Contracts in business-to-business relationships bring parties together and allow for the continued growth of industries and economies. These contracts outline expectations and responsibilities and prepare for unforeseen circumstances or a party’s intentional actions that lead to differences and disagreements that often call for arbitration. These clauses protect the parties from what has become an unpredictable and often lengthy judicial process. Clauses often vary in content but may be simple enough to invoke the process of arbitration.
This article will consider the diversity in the number of contracts that utilise these clauses, what these clauses look like, their benefits, and what one should consider when drafting such a clause.
Jul-Sep 2024 issue
ICDR