Conflict management is most effective when it is considered at the start, setting out clear expectations and establishing routes to resolution. This involves clearly defining roles and responsibilities to prevent any ambiguity, setting measurable performance standards to avoid disputes over quality and delivery, and establishing regular communication protocols to address concerns before they escalate into bigger problems. Dispute resolution clauses are the corner- stone of managing conflicts within a contract. These can offer a clear process for resolving disputes and can take various forms, such as negotiation clauses that encourage parties to resolve disputes through direct discussions before pursuing more formal methods; mediation clauses that involve third parties who can facilitate a confidential and non-binding resolution process focused on finding common ground; and arbitration clauses that provide a binding resolution by an arbitrator. Whilst dispute resolution clauses are fun- damental to effectively manage conflicts, governing law and termination clauses can also play a critical role. These clauses deter - mine which jurisdiction’s laws will govern the contract and where disputes will be resolved. This is particularly important in international contracts to avoid jurisdictional conflicts. Further, termination and force majeure clauses can help end a contract under specific conditions, by being structured to allow a party to exit the agreement if the other party breaches key obligations, whether for cause or simply for convenience. Force majeure clauses excuse non- performance when extraordinary events
In my experience, the closer the relationship between the parties involved, the broader and more nuanced the tools for conflict resolution need to be. For instance, in a family business, where relationships can be deeply intertwined, the overlap between the formal business framework and personal dynamics is significant. In contrast, in a purely commercial transaction, the legal avenues available for dispute resolution tend to be narrower and more defined. The challenge is not merely that the law can’t manage a conflict, but rather that the parties’ interests might be out of alignment with the rigid approach that it sometimes takes. On the other hand, the sort of rigidity offered by, say, a contract, can be helpful when there are unequal parties, providing a formal mechanism within which parties can maintain healthy and sustainable relationships. It’s important to recognise that conflict resolution isn’t something that should be addressed only after a dispute arises. Instead, the foundation of effective conflict management can be setbeforehand, in an agreement. At the same time, then mecha - nisms of conflict resolution are diverse, offering the sort of broad approach that is sometime necessary in resolving a problem. This article explores how conflict management often starts with a well-drafted contract, which not only defines the terms of the business relationship but also anticipates potential ways conflicts can be resolved. By considering the types of clauses that should be included, the strategic choices involved in selecting dispute resolution methods, and the role of ongoing contract management, fairer systems can be implemented to preserve relationships and manage power dynamics effectively.
THE LEGAL CORNER MAGAZINE | ISSUE 009 OCTOBER '24 | HALLOWEEN EDITION HB 30
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