Dispute adjudication board agreement: What you need to know
In any business or commercial contract, disputes are bound to arise. When this happens, parties need to have a dispute adjudication mechanism in place to resolve issues quickly and efficiently. One way of doing this is by entering into a dispute adjudication board agreement.
A dispute adjudication board agreement is a contractual arrangement where the contracting parties agree to appoint a board to make decisions on disputes that may arise between them. The board is made up of independent experts who have the expertise and experience to handle disputes.
The board`s role is to listen to both parties and provide a binding decision that both parties agree to accept. This decision is usually given in the form of a written award that can be enforced in a court of law.
One advantage of dispute adjudication board agreements is that they provide a quicker and less costly way of resolving disputes compared to going to court. The parties can decide on the board`s composition, appointment, and procedures when drafting the contract. This flexibility allows them to tailor the board`s function to suit their needs.
Another advantage of dispute adjudication board agreements is that they can help maintain business relationships. By agreeing to a procedure for dispute resolution, the parties can avoid sending disputes to court, which can be a lengthy and often acrimonious process. This can help preserve the business relationship and maintain the parties` reputation.
Dispute adjudication board agreements can be used in various types of contracts, including in construction and engineering projects. In these types of contracts, disputes can arise due to cost overruns, delays, and quality issues. By agreeing to a dispute adjudication board, parties can have issues resolved quickly and avoid the project stalling or becoming excessively costly.
In conclusion, dispute adjudication board agreements can be an effective way of resolving disputes in commercial contracts. They provide a quick and cost-effective way of resolving disputes, and they can help maintain business relationships. It`s important to seek legal advice when entering into a dispute adjudication board agreement to ensure that the agreement is properly structured and enforceable.