Conflicts are inevitable between humans and when such conflicts occur, it should be resolved. Dispute Resolution can simply be said to be the process of resolving disputes (conflicts) between parties.
A dispute resolution clause is an agreement within a contract which sets out the mechanism for the resolution of disputes between the contractual parties. The aim when drafting a dispute resolution clause should be to ensure that it is clear, internally consistent, workable and reflects the intentions of the parties and may be drafted as:
“The parties must attempt in good faith to resolve any dispute, difference or question between them arising out of or in connection with the Contract.
If a dispute, difference or question between the parties, arising out of or in connection with the Contract, cannot be resolved by direct negotiation between them, the parties agree to endeavor to resolve the matter by other means.”
It is important to note that a dispute resolution clause in a contract is to minimize the possibility of a dispute or misunderstanding escalating to the point where the parties are faced with a time consuming and expensive court action to resolve their differences. Often the parties to a contract will be required to undertake the dispute resolution process (ADR) before starting court action.
METHODS OF DISPUTE RESOLUTION
Parties to a contract can result to one of the following methods in resolving conflicts arising out of or in connection with the contract and they are:
Usually, it is expected that all other methods of dispute resolution has been tried and to no avail before resulting to Litigation (law suits).
Dispute resolution is important and very necessary as;
1. It aims to resolve contractual disputes early and quickly.
2. It keep disputes out of the public eye.
3. It helps maintain business relationships when contractual dispute arises; and
4. It may reduce the risk of costly and lengthy litigation.