Commercial contracts of all types, ranging from sales agreements to merger agreements often contain "dispute resolution" provisions. These provisions typically govern what happens if there is a claim or dispute arising out of or relating to the agreement. In essence, the dispute resolution clause is a contractual agreement as to how the parties are going to resolve any differences that may arise.
Having litigated commercial contracts of different types for many years, one observation is that parties often do not pay enough attention to these provisions at the time the contract is drafted. At the time the contract is drafted, the parties are often focused on price and other key business terms. In addition, at the time a transaction is coming together, both sides are typically looking forward to a mutually beneficial relationship. In short, at the time a contract is finalized and signed, neither party tends to believe anything will go wrong. As a result, the dispute resolution provision, if it is considered at all, is often left to the last round of discussions.
Dispute resolution provisions often address two potentially important points: (1) Where a claim or dispute will be decided, and (2) how the dispute will be decided. Both issues require careful consideration.
John Watkins practices primarily in the field of business litigation and dispute resolution, and currently concentrates on trade secret, insurance coverage, and corporate disputes. John also advises several clients on their general business matters and reviews, negotiates and drafts terms and conditions of sale, non-disclosure agreements, and other corporate documents. John represents a number of international companies or their U.S. subsidiaries and has given seminars explaining various aspects of the U.S. legal system to international business groups. John also handles matters in arbitration and mediation and is a registered mediator. Read more about him.