How to Avoid Litigation

Using ADR Clauses To Control Your Risks And Costs

Few people, other than trial lawyers, enjoy the prospect of going to court, because of the enormous costs, lengthy delays in having a dispute resolved, uncertainty of outcome, and lack of control disputants have over the process. Many people are unaware that by inserting an alternative dispute resolution (ADR) clause in their contracts, they can avoid ending up in court if a dispute later arises. ADR clauses provide alternatives to the court system for resolving a dispute. The most common ADR clauses provide for mediation and/or arbitration. Following is an example of an ADR clause that uses mediation as a first step, and arbitration as the final step for resolving a dispute:


Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be submitted to mediation administered by Henning Mediation and Arbitration Service, Inc. (HMA) in accordance with its procedures. If the parties are unable to resolve their dispute in mediation, the dispute shall be settled by binding arbitration administered by HMA in accordance with its rules (or other rules agreed to by the parties), and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.


HMA does not provide legal advice. When drafting contract clauses an attorney’s assistance is recommended. HMA’s consultants are available to consult with your attorney and business people who are considering adopting an ADR clause.


Before naming an organization in your contract clause to administer your ADR process, compare costs, service, and quality:

» HMA charges no filing fees or hearing room fees to conduct your mediation or arbitration.

» There is no bureaucracy to wade your way through, and no lengthy delays in getting your process scheduled.

» HMA’s neutrals are recognized as the best in the field.

» Your mediation or arbitration will be conducted in a comfortable, confidential, and professional setting.

» HMA can apply any arbitration rules that the parties’ contract requires.