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The most important clause in any contract agreement

The most important clause in any contract agreement

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The GIST with DRC!

THE MOST IMPORTANT CLAUSE IN ANY CONTRACT AGREEMENT

By Amina Nwakaego Nwabuezeh

Welcome to the gist with DRC.
I know by now you must be wondering what this clause is, I mean you think all clauses in an agreement are equally important. Yes, every clause in a contract agreement is important, but I did mention that this clause is the most important.

Is it not frustrating that every disagreement in a business relationship has to go through the rigorous procedures of litigation? From the point where you contact a lawyer to the point of countless adjournment and in most cases, the respondent refuses to show up in court and this factor further contributes to the extremely high rate of delays in reaching a reasonable conclusion or judgement on commercial disputes. And then the cost and time you will invest in this process? That’s a story for another day.

So, what if I tell you that there is a way in which you can save yourself from all this bruhaha that accompanies referring your cases to litigation?

Yes, there is a solution and that brings us back to the most important clause in any contractual agreement which is the “ADR Clause”.

This clause is couched in a way that enjoins parties to the contract to refer any dispute that arises out of the contract agreement, first to (ADR) Alternative Dispute Resolution which provides an amicable means for resolving a conflict as an alternative to litigation. The best alternative for your dispute depends on several factors including your goals and your readiness to resolve it.

An ADR clause can help with many inconvenient post agreement situations. It is included in a contract or agreement and provides for a dispute resolution process that falls outside of the judicial process.

The clause usually includes:
• Agreement to refer to ADR.
• Type of mechanism to be adopted or utilized.
• Laws or rules to guide the process.
• Where Arbitration is chosen, number of arbitrators.
• Appointing authority or institution to appoint arbitrator(s) or mediators etc.
• Time frame within which the entire proceedings is expected to take.
• Others

For an ADR clause to be binding, it must be well written and specifically acknowledged by all parties to the contract. This element is crucial for the clause to take effect.

Consult with the Dispute Resolution Centre of Abuja Chamber of Commerce before finalizing your agreements to make sure your ADR clause is enforceable.

A.N NWABUEZEH Esq

FOR: DISPUTE RESOLUTION CENTRE OF ABUJA CHAMBER OF COMMERCE

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