Business Law Chapter 4

Alternative Dispute Resolution (ADR)

s a way of resolving a legal dispute without going to a

traditional court trial. ADR is usually faster, less expensive, and more flexible than a trial. A way

of going outside of the court system to have a quicker result

Complexity

cannot go through ADR, meaning if the case is too complex, they won’t entertain

the case

Benefits of ADR

Lower cost, more efficient, scheduled faster. Even if the case isn't completely

solved, you can narrow your case

Cons of ADR

doesnt always save money, its not suitable for all cases’

3 cases that go through ADR

Employment, contract, and tort law

ADR can not be used when

using constitutional law, when addressing civil rights, or when

criminal law is involved; the cases must go through the court system.

Meditation (Mediator)

A neutral person helps both sides reach an agreement, but does not

make the decision for them. Has no power to force each party to agree or comply. Can be

requested at any time before or after a lawsuit is filed. Least formal version, and the non-binding

version.

Arbitration (Arbitrator)

A neutral person hears both sides and makes a decision, which may

be binding. More structured and formal version of ADR; the arbitrator can make the final

decision.

Negotiation

the two sides communicate directly to try to reach an agreement

Federal Arbitration Act (FAA)

a law that gives the arbitrator the authority to make a decision

that is enforceable.

Medarb-

a combination of mediation and arbitration. You start with a mediation session and

hope to be done with just mediation, but if there are still problems to be resolved, they will

proceed to arbitration

Early neutral evaluation

evaluation-A type of Alternative Dispute Resolution (ADR) where a neutral third

party reviews both sides of a legal dispute early in the case and gives an objective opinion

about the strengths and weaknesses of each side’s case. The evaluation can help the parties

understand their chances and possibly reach a settlement without going to trial.

Proactive-

A way of handling a business dispute before it becomes a major legal problem or

goes to court. It involves identifying problems early and working with the other party to find a

solution, such as negotiating an agreement or using mediation.

Ways ti engage in proactive

ADR contract clauses

Partnering-

A method of resolving business disputes where the parties work together as a

team to prevent problems and find solutions. It focuses on cooperation, communication, and

building a good working relationship instead of fighting over the dispute in court.