Using ADR to resolve contract disputes

While it would be ideal if agreements would be carried out without any issues, businesses in Louisiana and elsewhere understand that this unfortunately is not a reality in the world of business. Though issues and disputes regarding the terms and conditions of business contracts do arise in the normal course of business, there are ways contract disputes can be addressed, helping companies resolve these problems in a timely and effective manner.

In some cases, Alternative Dispute Resolution methods are ideal techniques to tackle contract disputes. While each process is diverse and embodies its own costs and benefits, most ADR techniques have a common factor — role of negotiation. The parties to an ADR proceeding are generally agreeing a negotiating on a settlement without moving forward to litigation.

A common ADR practice is known as arbitration. This process involves the parties to the proceeding to agree in advance to abide by or be bound by the award issued by the arbitrator after both sides had the opportunity to be heard. When parties move forward with arbitration, it is often because there was a clause already included in an agreement stating that the parties would settle any disputes through arbitration. Arbitration is often considered the springboard to litigation because if arbitration fails, it is likely that the parties will end up in court to settle their dispute.

Another method is mediation. This process is considered an assisted negotiation, which involves disputing parties agreeing to enlist a neutral party to help them reach an agreement. The job of a mediator is to help identify issues, explore possible agreements, discuss possible consequences and encourage the parties to accommodate the needs of the other party throughout the process.

Other ADR processes include mini trials, which occurs when the attorneys for the parties present a brief version of the case to a panel. There is also an ADR option for summary jury trials, which are primarily used in the federal courts. This provides the disputing parties with the opportunity to try their case before an advisory panel of jurors. Lastly, parties can use the ADR method known as early neutral evaluation. This is an informal process that helps evaluate the strengths and weaknesses of the positions of each party.

While major business disputes such as a contract breach might cause some parties to consider litigation to address these legal issues, it is important to understand that there are other options available to resolve a contract dispute. An ADR process could be an effective, cost-reducing and timely step to take.

Source: Adr.findlaw.com, “Alternative Dispute Resolution (ADR): Overview,” Accessed April 25, 2016