Brief synopsis of dispute resolution as a clause of a contract
Clauses of a contract addresses to the fundamentals of the subject of the agreement. Dispute resolution is a fundamental clause of the contract. The dispute resolution clauses in contract states that in case of a dispute regarding the contract arise, in which method it shall be solved (Common Contract Clauses, 2018). The dispute resolution clause specifically mentions that for the resolution of a contract, whether the dispute shall be resolved by litigation, negotiation or arbitration. In the landmark case of Ericsson AB v EADS Defence & Security Systems Ltd. the importance of dispute resolution as a common clause of contract was highlighted. The dispute resolution clause of a contract shall depend upon the form of resolution process that the parties choose. Additionally, it will consider the governing law of the contract, that is the law of the country that will govern the contract. There are two forms of dispute resolution, such as, non-binding forms and the binding forms. While, in the non-binding dispute resolution, the parties reach to a consensual resolution with the consent of both the parties, binding resolution focuses on involving a third party for resolving the disagreement, and whose decision shall be binding upon them (Goldberg et al., 2014).
Research on contract at work
In the landmark case of Deutsche Bank AG v Sebastian Holdings Inc  EWCA Civ 998,  All ER (D) 98 (Aug), there were dispute regarding jurisdiction in an international contract (NewLawJournal, 2010). In this case it was presumed that, where there is multiple related agreement, the court shall determine whether a dispute comes under the jurisdiction clauses of the agreement, which will depend upon the clauses of the contract and the intention of the contractual parties.
Pros and cons of using dispute resolution in a contract clause
In this case, individual jurisdiction was stated in the clauses of the contract. In terms of dispute resolution, different contracts, there were different specified jurisdiction mentioned. Including the jurisdiction and governing laws in the occurrence of a dispute was held liable as it was time saving and was less expensive. The clauses which stated the jurisdiction, was decided mutually, so there were more chances of compliance of the clauses.
As case of a contract that includes the jurisdiction of resolution of dispute, this case faced some disadvantages also. Being the jurisdiction specified, there were no chance of adjusting the jurisdiction in relation to the cause of action. There were no flexibilities in terms of deciding jurisdiction of the dispute resolution accordingly the place of arising of dispute.
Necessities of using dispute resolution in the clauses of contract
In case of making a contract legally binding upon the parties, the dispute resolution clause in a contract is significantly important. A dispute resolution clause specifically mentions who can help when the dispute arise, which makes the dispute solve easily. When the jurisdiction to deal with a dispute arising out of the contract is specified, by starting the resolution process immediately, the prolonging disagreement can be ignored. The appropriate clause of dispute resolution can help in working through the dispute in a cost-efficient manner. Pre-determination of dispute resolution clauses can help in fulfilling the terms of the contract quickly, after the immediate resolution takes place. In this case, the pre-determined clause of resolving dispute helped in giving the chance of maintaining a cordial relationship between the parties. By selecting the consensual dispute resolution mechanism in a contract, which is inter-provincial, the laws, which shall bind the contract, is pre-decided. At the beginning of court proceedings, the specified law shall be applied and they will act according the mechanism that they have already adopted in the contract clauses (Grenig, 2016).
Common Contract Clauses. (2018). Retrieved from https://www.youtube.com/watch?v=7ZkSI_8ju4o
Goldberg, S. B., Sander, F. E., Rogers, N. H., & Cole, S. R. (2014). Dispute resolution: Negotiation, mediation and other processes. Wolters Kluwer Law & Business.
Grenig, J. E. (2016). Evolution of the role of alternative dispute resolution in resolving employment disputes. Dispute Resolution Journal, 71(2).
NewLawJournal. (2010). conflict-laws—jurisdiction—challenge-jurisdiction. Retrieved from https://www.newlawjournal.co.uk/content/conflict-laws%E2%80%94jurisdiction%E2%80%94challenge-jurisdiction