If you are a business owner or an individual entering into a business agreement, you may have heard of an ADR agreement. ADR stands for Alternative Dispute Resolution, which is a process that allows parties to resolve disputes without going to court. In this article, we will provide you with an ADR agreement sample to give you an idea of what it looks like and how it works.
Before we dive into the ADR agreement sample, let`s discuss why it`s important. Disputes can arise in any business relationship, and going to court can be time-consuming and costly. With an ADR agreement in place, parties can come to a resolution outside of the legal system, which can be quicker and less expensive. ADR can take many forms, such as mediation, arbitration, or negotiation, and the ADR agreement lays out the process for resolving disputes.
Here is a sample ADR agreement:
Alternative Dispute Resolution Agreement
This Alternative Dispute Resolution Agreement (the «Agreement») is entered into between ______ (the «Company») and ______ (the «Other Party») on ______ (the «Effective Date»).
1. Dispute Resolution Process
In the event of a dispute arising between the Company and the Other Party, the parties agree to resolve the dispute through alternative dispute resolution (ADR) rather than through the courts. The ADR process will consist of the following:
Mediation: The parties will first attempt to resolve the dispute through mediation. The mediator will be selected by mutual agreement between the parties. If the parties cannot agree on a mediator, a mediator will be appointed by the American Arbitration Association (AAA). The cost of the mediator will be shared equally between the parties.
Arbitration: If the parties are unable to resolve the dispute through mediation, the dispute will be resolved through binding arbitration. The arbitrator will be selected by mutual agreement between the parties. If the parties cannot agree on an arbitrator, an arbitrator will be appointed by the AAA. The arbitration will be conducted in accordance with the rules of the AAA. The cost of the arbitrator and the arbitration will be shared equally between the parties.
2. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of ______ without regard to its conflict of law provisions.
3. Entire Agreement
This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether verbal or written.
4. Amendment
This Agreement may be amended or modified only in writing signed by both parties.
5. Counterparts
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
6. Binding Effect
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
In conclusion, an ADR agreement is a valuable tool for resolving disputes without going to court. This sample ADR agreement provides a clear outline of the process for resolving disputes through mediation and arbitration. It is important to note that ADR agreements can be customized to fit the needs of your specific business relationship, so it`s always best to consult with a lawyer to ensure you have the best agreement for your situation.