The Importance Of The Right Dispute Resolution Clause In Contracts
As attorneys who regularly work on breach of contract disputes, we are familiar with the full gamut of dispute resolution clauses written into contracts – the good, the bad, and the ugly. While the right dispute resolution clause can help ensure that parties have a smooth procedure in place for any disagreements that come up, conversely, poorly written clauses can cause more trouble than contracts completely lacking in dispute resolution clauses. In addition, high court interpretations of existing dispute resolution procedures already written into key laws is also very important to uphold parties’ rights within those laws.
Standard Dispute Resolution Clauses
Most dispute resolution clauses follow a fairly standard template, and include, at a minimum:
- Negotiation procedures that may involve specific experts and/or committees
- The next step of consulting a trained mediator
- (If all else fails) trying other types of mediation and/or litigation, as well as choice of law and jurisdiction
- The ability to settle at some stages of the process
Unfortunately, if the clause is too complex or inserts too many steps or procedures in the process, it can actually have the effect of delaying and/or making settlement impossible, or if the clause is improperly written, the court could find that it is unenforceable. This can occur if the clause isn’t sufficiently certain or unclear, or violates public policy, etc.
When you are drafting, or considering entering into, any contract, you want to make sure that any potential dispute has been planned out and potential resolutions are carefully considered well ahead of time. In an effort to smooth track a potential dispute, consider addressing the additional following subjects in your dispute resolution clause:
- Which staffer(s) on each side are going to handle the dispute
- Whether expert determinations will be involved
- Be as specific as possible, while also keeping things as simple as possible, and include an approximate length of time for each stage in the process, as well as consequences for lack of cooperation
- If you would like to provide parties involved with the opportunity to settle at any particular stage, make that clear
Supreme Court to Review Sixth Circuit (Ohio)’s Decision on Dispute Resolution in Special Ed Cases
The Supreme Court has agreed to hear a case that involves how parents of students with disabilities approach the dispute resolution process with school districts. Currently, the Individuals with Disabilities Education Act contains dispute resolution procedures to address disagreements when they arise and arguably encourages voluntary settlement at several points within the administrative process by allowing parents to resolve their disputes without entering into adversarial hearings. However, the Sixth Circuit’s recent decision could result in families, instead, rejecting settlement in an effort to preserve their right to bring claims later on in the process because it arguably limits and deters the dispute resolution system early on in the administrative process and, in doing so, deters those involved from accepting a settlement, as they could risk being able to bring a claim later on in the process by doing so.
Columbus, Ohio Contract Attorneys
For expert advice on contract and/or dispute resolution processes and concerns, contact our Columbus breach of contract attorneys at the Kohl & Cook Law Firm LLC to find out how we can help.