Why Do I Need Effective Dispute Resolution Clause In Contracts

When you do business, you enter into contractual business relationships many times with your business partners, clients, customers, employees, suppliers, etc. it helps you to ensure the interrupted service from their sides, which is essential for the all-round development of your business.


Disputes are quite common in business. Right from starting a business and expanding its clout to new geographical locations/places, dispute strike you many times. So, in order to avoid the wastage of time and money on needless litigation and cases, most of the business organizations keep a provision of dispute resolution clause in their contracts. The enforcement of such clauses generally means that the involved parties agree to some terms and conditions to avoid the potential disputes. Have a look at some other uses of effective dispute resolution clause in contracts, which are mentioned here below:

1. Financial Benefits

The most obvious benefit of dispute resolution clauses in business contracts is that facilitates easy settlement of disputes between the franchisor and franchisee without starting any legal procedure. If it is implemented successfully, it saves all parties costs, time, and risk up to a great extent. For example, disruptions in the lives of the involved parties, expert witness costs, depositions, etc.

2. Easy Negotiations And Mediations
The dispute resolution clause makes Negotiations and mediations possible between the parties which are involved in quarrels. When a dispute is surfaced, different parties can participate in one-day meeting, discuss the points of discord or grievances and find out the best possible solutions without taking any legal action. It is also a notable fact that the success rate of mediation for resolving complex disputes before litigation is rated to be 70:2. If you have complicated disputes with your business partners or clients, Dispute resolution firms can help you to find out the solution of the matter through dialogue and face-to-face communication.

3. Continued Business Relationship

In most of the cases, alternative dispute mechanisms compel the disputing parties to end their problems by making some compromises. It benefits both of them if termination of business relationship is not a part of the agreed results. It helps business organizations to maintain their relationships further, carry out various business operations and earn the desired revenues without any problem.

4. Compliance With Terms And Conditions Of The Contract
When dispute resolution clauses are implemented, the involved parties are bound to show the compliance with the terms and conditions of the agreement they have signed. Based on their specific needs and convenience, they can make changes in the doctrine of the contract. Even Pretrial dispute resolution can stop litigants from saving surprises during the time of trial. It also helps organizations to maintain the privacy of their information and reach out a feasible settlement as soon as possible.

5. Ease in court hearings
These days, different courts in India are taking note of mediation clauses while hearing business litigation cases if they are clearly defined. But, Courts are also rejecting indefinite or vague clauses. Therefore, it is your duty to avail the legal services offered by International lawyers in India and prepare dispute resolution clauses in plain and simple language. It should also fit the existing law. If it happens, you can fight the legal cases against your rival party with full confidence and win within a few hearings.

Final Words:
The dispute resolution clauses are of great help for business organizations and firms. It helps them to avoid potential disputes and operate their businesses smoothly and successfully.



Source: https://ahlawatassociatesadvocates.quora.com/Why-Do-I-Need-Effective-Dispute-Resolution-Clause-In-Contracts