Many contracts contain clauses that control what happens when a disagreement or dispute arises between the parties to the contract. Dispute-related clauses include mediation, arbitration, attorney’s fees, choice-of-law and forum-selection. Arizona courts generally uphold such clauses, following a policy of allowing parties to freely draft their own contracts, as long as the clauses are knowingly incorporated into the contract.
Because of the time and expense involved in traditional court proceedings and litigation, businesses are increasingly including clauses in their contracts which specify some form of “alternative dispute resolution” or “ADR.” The clauses may specify mediation, arbitration or a combination of these ADR processes in an attempt to avoid litigation. Clauses for attorney’s fees, choice-of-law and forum-selection may be an advantage to your company in the event of litigation.