English Commercial Law - boilerplate clauses (Dispute resolutions)
A dispute resolution clause may be incorporated into the contract, particularly if it involves a long-term supply agreement. These are commonly referred to as "midnight clauses" since they are sometimes the last terms to be negotiated between the parties and are often drafted hastily and without much deliberation. The parties may incur significant costs as a result of a poorly written clause. Arbitration or litigation, both of which are costly for the parties, have traditionally been the options for resolving disputes. The use of combined or multi-tiered agreements, which first allow for negotiation, mediation, and subsequently arbitration or litigation, is becoming more and more common among parties. This gives the parties a framework to adhere to in the event of a disagreement, allowing them to save the time and money associated with debating how to resolve disputes or being forced to turn to litigation. A well-written clause can also aid in preserving the parties' positive business connections.
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