Keeping the Peace: A Sample Dispute Resolution Clause for Your EPC Contract
Disputes happen. Even in well-crafted EPC contracts, disagreements can arise. That’s why having a clear dispute resolution clause is crucial. Here’s an example to consider:
Dispute Resolution:
This clause outlines the steps to follow if a disagreement emerges from the contract:
- Negotiation (Let’s Talk it Out): The first attempt at resolution should be a good faith discussion between both parties. Open communication is key!
- Mediation (Finding Common Ground): If negotiation fails within a specified timeframe (e.g., 30 days) after a written request, mediation is the next step. A neutral third party facilitates a discussion to reach an amicable solution. The clause should reference specific mediation rules to be followed.
- Arbitration (A Final Decision): If mediation doesn’t resolve the dispute within another specified timeframe (e.g., 60 days) or a party refuses to participate, arbitration becomes the final step. An arbitrator issues a binding decision, following predefined arbitration rules referenced in the clause. The clause should also specify the location, language, and number of arbitrators.
Governing Law:
This section defines the legal framework that applies to the interpretation and enforcement of the entire contract. Specify the governing jurisdiction whose laws will be used.
Remember, this is just a sample. A qualified lawyer can tailor a dispute resolution clause to fit the specific needs of your EPC contract, considering factors like project location and complexity.
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