Originally from Dispute Resolution Journal

THE AGREEMENT

Let’s say you’re an executive in a high-technology firm, and you negotiated a business agreement with another firm. You are excited because the agreement will bring attractive profits now and set the stage for a long-term relationship that will expand your marketing into new places.

Perhaps the other company is your customer, supplier, licensee, partner or even a competitor. Whatever the case, your attorney went over the many detailed terms with the proverbial fine tooth comb and it passed legal muster.

After it was signed, you read something about Alternative Dispute Resolution (ADR) and wondered whether an ADR clause to deal with disputes should have been in the contract. It’s unlikely that your attorney didn’t know about that possibility—it’s more likely that she thought that because of the finality of a binding arbitration award, you shouldn’t give up in advance the right to appeal any decision. Or perhaps she knew that the very lack of finality in mediation would mean that if a settlement is not reached, the whole matter would have to be re-argued in a different forum. Or maybe she thinks that there might not be any savings in money or time over litigation.

In any case, it’s too late now, and the business arrangement will have to proceed without an ADR clause in the agreement.