A Road Map for Dispute Resolution

Dispute resolution is a general term referring to the processes used to resolve conflicts and disputes, including litigation in a court or alternate dispute resolution processes such as mediation or arbitration. Contracts should contain provisions that state what the parties have agreed to in resolving potential disputes.

Below are sample provisions providing for the parties' agreed to choice of law and choice of venue in litigation. 

Choice of Venue. "The Parties agree that any litigation to enforce this Agreement may be brought exclusively in the Superior Court of Spokane County, Washington or the United States District Court for the Eastern District of Washington." (Law Insider.)

Choice of Law. "This Agreement is to be construed according to the laws of the State of Washington and of the United States of America." (Law Insider.)

The American Arbitration Association is a great resource for alternate dispute resolution choices.

Arbitration. "Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial [or other] Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof." (American Arbitration Association.)

Mediation. "If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure." (American Arbitration Association.)

There is a way to have a more complete, multi-step dispute resolution clause. Generally, it goes something like this. First, the parties agree to attempt to resolve their conflict or dispute through good faith negotiation. If the parties are unable to resolve the conflict or dispute through negotiation, the parties agree to mediation. And if mediation does not resolve the dispute, the parties agree to then resolve their dispute through either arbitration or litigation. A well-crafted dispute resolution clause should contain specifics for each step, such as setting time frames for each step, or designating a mediator or arbitrator, or choosing a venue and law in case of litigation.

Dispute resolution clauses may seem like "boilerplate" provisions. Don't overlook them. Taking the time to communicate expectations and to draft a clear and complete road map to resolving potential disputes saves time and money in the event of conflict and it is beneficial to your contractual relationships.