Tips And Traps When Entering Into Commercial Contracts Understanding Alternative Dispute Resolution Clauses

It is becoming commonplace for consensual alternative dispute resolution (ADR) clauses to be included in a wide variety of commercial contracts, including construction and franchise agreements. Additionally, Courts in Queensland, together with many Tribunals, have the power to coerce litigants to attend and participate in various forms of ADR.

Whilst this paper will consider ADR clauses and procedures in general, the focus will be upon mediation, particularly in the commercial arena.

One explanation for the increased prominence of ADR is the benefits which it can provide to participants. The potential benefits of ADR include:

1. Allowing parties to negotiate a settlement within known limits or boundaries;