Clause library
Dispute resolution clause, explained
A dispute-resolution clause says how a fight is handled: negotiation, mediation, then court or arbitration, and which forum hears a claim that cannot settle.
Last updated 28 October 2026
What does a dispute resolution clause do?
A dispute-resolution clause is the map for a fight: talk first, mediate, then sue or arbitrate. It sits next to governing law, which names the legal system; this clause names the process and the forum. In England and Wales the usual default is exclusive English courts. Scotland has its own courts. We write the ladder before anyone needs it.
Should we try mediation before court?
Many commercial papers require a short negotiation, then mediation, before a claim is issued, with a carve-out for urgent injunctions. That keeps a scope fight out of a claim form while still letting a party protect IP quickly. Put a time limit on each step so the clause cannot stall. Mark talks without prejudice.
When do people choose arbitration instead of court?
Arbitration is a private tribunal the parties appoint. It is common on cross-border deals where neither side wants the other’s courts, or where hearing confidentialityConfidentiality is a promise to keep shared information private and to use it only for the agreed purpose.More in the glossary matters. It adds cost and a narrower appeal. For a UK freelance or studio job, exclusive English courts are the usual default. Name the seat if you choose arbitration.
What does exclusive jurisdiction mean here?
It means only the named courts can hear the dispute. A non-exclusive clause lets you sue in those courts and also in other courts that would otherwise have jurisdictionJurisdiction is which courts will hear a dispute if the parties cannot agree.More in the glossary. Pair it with governing lawGoverning law is the legal system the parties choose to interpret their contract and decide disputes about it.More in the glossary so both questions have an answer. See jurisdiction. Do not name English law and then stay silent on the court.
Where should this clause live in the paper?
Near the end, with governing law, notices and entire agreement. A dispute clause that never names an address for notice is how a mediation clock never starts. Put the same contact details in both places. On Contracts.io both sides edit that block on the shared draft, then e-signatureAn e-signature is any electronic way of showing agreement to a document, such as a typed name, a drawn signature or a click.More in the glossary it, instead of arguing later about which Word file won.
Example wording
Example · our own drafting
The parties will try to resolve any dispute through good-faith negotiation for [14] days after written notice, then through mediation. Either party may then refer the dispute to the exclusive jurisdiction of the courts of England and Wales. This clause does not stop a party seeking interim relief from any court of competent jurisdiction.
In Plain English
If there is a disagreement, both sides talk for 14 days after a written notice, then try mediation. After that, only the courts of England and Wales hear the claim. Either side can still go to a court quickly for an urgent order, such as to stop a leak of confidential information.
What should you watch for?
| Point | Watch for | Push for |
|---|---|---|
| Ladder | Open-ended ‘negotiate in good faith’ with no clock. | Named days for talks, then mediation, then court. |
| Forum | Silence on courts, or two different cities in two clauses. | The same forum as governing law. |
| Injunctions | A mediation lock that blocks urgent relief. | A carve-out for interim remedies. |
| Notice | A dispute clock that never starts because notices are undefined. | The same contacts as the notices clause. |
| Cost | Arbitration on a small UK freelance fee. | English courts, unless a cross-border reason justifies the extra cost. |
Which contracts include it?
Lex includes this clause in, among others:
- Services agreement (master services agreementA master services agreement (MSA) sets the legal terms for an ongoing relationship, with each project then agreed in a separate statement of work.More in the glossary)
- Consulting agreement
- Freelancer agreement
Draft a master services agreement with this clause
Free for the other sideLex drafts it in Plain English beside the legal wording. Share one link; both sides agree and sign.
Frequently asked questions
What does a dispute-resolution clause mean?
It sets the process for a disagreement: usually negotiation, then mediation, then court or arbitration. It also names which forum hears a claim that cannot be settled.
Do we have to mediate before going to court?
Only if the clause says so. Many commercial contracts require a short mediation step, with a carve-out so either party can still seek an urgent injunction.
Should we choose arbitration or court?
For a UK services or freelance job, exclusive jurisdiction of the English courts is the usual default. Arbitration is a private tribunal — useful on some cross-border deals, and usually more expensive.
What does exclusive jurisdiction mean?
Only the named courts can hear the dispute. A non-exclusive clause also allows claims in other courts that would otherwise have jurisdiction. See /glossary/jurisdiction.
Where does a dispute-resolution clause sit?
With governing law, notices and entire agreement clauseAn entire agreement clause says the signed contract is the whole deal and replaces earlier emails, proposals, pitch decks and conversations. In England and Wales it stops those earlier words becoming extra terms. It does not, by itself, give a licence to mislead: claims in fraud still sit outside it, and non-reliance wording is read against the Misrepresentation Act 1967.More in the glossary, near the end of the paper. Name the same contacts in the notices clause so a mediation clock can actually start.
Related
The legal wording governsLast reviewed 28 October 2026Pending lawyer review