Contract Glossary
Dispute Resolution
Definition
Dispute resolution is how you settle disagreements when the contract goes sideways. Most contracts spell out a process: negotiate first, then mediate, then arbitrate or go to court. The clause you agree to now determines your options later.
In Practice
A well-drafted dispute resolution clause in a $50,000 consulting agreement might say: first, the parties attempt to resolve the issue through direct negotiation for 30 days. If that fails, they enter mediation (cost: $2,000-$5,000). If mediation doesn't work, binding arbitration under AAA rules (cost: $5,000-$15,000). Compare that to skipping straight to litigation: $30,000-$100,000+ in legal fees and 1-3 years of your life.
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