NCJ Number
97008
Date Published
1984
Length
9 pages
Annotation
Issues that should be considered in drafting contract clauses to mandate the use of alternative dispute resolution (ADR) are identified.
Abstract
The drafter should focus on at least four prominent issues: (1) enforceability, (2) use and selection of a neutral advisor, (3) conduct of ADR discovery, and (4) the process, procedures, and rules to be used. Enforceability is largely irrelevant, because well-drafted ADR clauses will provide that good faith participation in the process is required before initiating litigation. The functions that neutral advisors can provide, including mediation or administration of the ADR proceeding, are identified, and advantages in specifying in the contract the person or the body from which an advisor will be selected are identified. Possible features of discovery, such as providing that the parties exchange documents prior to the arbitration or that discovery be limited to a designated period, are considered. Further, other procedural provisions may also be advisable; all clauses should specify the steps in the process as well as the movement from one step to the other. Parties are urged to make clauses as nonconfrontational as possible by providing for resolution of the conflicts likely by providing for resolution of the conflicts likely to arise. Additionally, examples of the 'non-obligatory' clause; the narrowly drafted, elaborate clause; the 'bare-bones' clause; and a clause designed to solve the problems in ALCOA v. Essex are provided. Finally, drafters are urged to avoid provisions which render ADR too inflexible, since the rigidity of conventional litigation is one factor which has encouraged the use of ADR.