Sample ADR Contract Clauses

Short form: Sample med-arb clause for small jobs (i.e., projects less than $3,000):

In the event a dispute arises between the Contractor and the Owners, the parties agree to seek resolution exclusively first through mediation, or if that shall fail, through binding arbitration, and neither shall have right to bring suit in Court. The Construction Industry rules of the American Arbitration Association (AAA) shall apply, and the hearing(s) shall take place in [City], [State].

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Husband	Wife	Remodeler

Long form: Sample med-arb clause for larger jobs:

NOTICE: THIS AGREEMENT IS SUBJECT TO MEDIATION AND BINDING ARBITRATION.

In the event a dispute arises between the Contractor and the Owners, the parties agree to seek resolution exclusively through mediation, or if that shall fail, through binding arbitration as follows: 1) Either party may invoke alternative dispute resolution by giving written notice via regular mail or fax. 2) The notice should include a brief description of the disagreement. 3) The parties or their representatives will first meet promptly in an effort to resolve the dispute amicably. 4) Work on the Project shall cease during the pendency of mediation or arbitration.

Upon request of either party to this agreement, all unresolved disputes (not limited to breach of contract action) relating to this agreement and not barred by the applicable limitations period shall be submitted for mediation and/or binding arbitration, in accordance with the Construction Industry Arbitration and Mediation Rules of the American Arbitration Association (AAA) then in effect, and neither party shall have the right to bring suit in Court. The parties shall review the qualifications of several mediators and arbitrators with proven experience resolving residential construction matters via alternative dispute resolution methods. The parties agree to cooperate in agreeing upon a date, time and location for the hearing. The hearing will take place in [City], [State]. As an alternative the parties may agree to use the [City] Better Business Bureau system for alternative dispute resolution for a faster, cheaper remedy. In any case, the AAA Rules for Construction shall apply. Either party may specifically enforce 1) a decision rendered under this agreement to arbitrate or 2) any valid agreement to arbitrate with additional persons, under applicable arbitration laws. The award shall be final and binding, and any court with jurisdiction over the decision may enter a judgment upon the arbitrator's decision.