A dispute resolution clause is an agreement, separate or within a contract, which sets out the mechanism for the resolution of disputes between the contractual parties. The scope of that agreement is determined in the drafting of the clause. The inclusion of Alternative Dispute Resolution (ADR) clauses in commercial contracts is a common practice. Arbitration, mediation and other alternatives to litigation are most frequently accessed by reference to a “future disputes” clause in a commercial contract.

The ADR process provides parties with alternative means of resolving their disputes without resorting to litigation which saves time and cost. Unlike in litigation, the process is private and parties themselves are able to decide the rules and procedures for resolving their dispute and to select a mutually acceptable neutral third party to facilitate their resolution.