Contracts are legally binding agreements that establish the terms of a relationship between two or more parties. However, disputes can arise even when a contract is in place. In such cases, it is common for contracts to include alternative dispute resolution (ADR) provisions to avoid the time and expense of going to court. This article will discuss what ADR means in Ontario contracts and how a lawyer can help in such situations.
What is Alternative Dispute Resolution?
Alternative dispute resolution refers to the use of methods other than going to court to resolve disputes between parties. The most common types of ADR are mediation and arbitration. Mediation involves a neutral third party (the mediator) who helps the parties reach a mutually acceptable resolution. Arbitration is more like a trial, where a neutral third party (the arbitrator) hears evidence and makes a binding decision.
ADR provisions in Ontario Contracts
ADR provisions in Ontario contracts typically require the parties to attempt to resolve disputes through mediation or arbitration before going to court. These provisions may be mandatory or optional, depending on the agreement of the parties.
Mandatory ADR provisions require the parties to participate in mediation or arbitration before going to court. Failure to comply with the ADR provision can result in the court dismissing the case or imposing penalties on the non-compliant party.
Optional ADR provisions give the parties the choice to attempt to resolve disputes through ADR before going to court. If the parties choose to use ADR, they can negotiate the terms and select the mediator or arbitrator.
How a Lawyer Can Help
If a contract contains an ADR provision, it is essential to seek legal advice from a lawyer before a dispute arises. A lawyer can review the contract and advise on the ADR provisions' meaning and implications, including the timeframes and procedures involved. A lawyer can also advise on the potential benefits and drawbacks of using ADR, such as the potential cost savings and the possibility of a binding decision.
If a dispute arises, a lawyer can assist in initiating the ADR process, selecting the mediator or arbitrator, and negotiating the terms of the ADR. A lawyer can also represent the client's interests during the ADR process and advise on the potential risks and benefits of settling the dispute.