CLAUSE: Dispute Resolution

“Any controversy, claim, or dispute arising out of or relating to this Agreement shall, at the option of he Hotel, be resolved by binding arbitration or through an action brought in any court of competent jurisdiction in the state in which the Hotel is located for trial and determination by such court sitting without a jury. Group hereby waives the right to a trial by jury.”

EFFECT: That's Your Problem

A dispute resolution clause like the one above is an effort by the parties to decide how a contract dispute will be resolved before it occurs. Although the law provides a right to your day in court, other dispute resolution methods are available, including negotiation, mediation, and arbitration.

One of the main problems with the above clause is that the phrase “at the option of the Hotel” allows the hotel to single-handedly make the dispute resolution method decision without any input from the group. Specifically, the hotel in this instance may decide whether a contract dispute is resolved by binding arbitration or by a bench trial.

Another issue with the above clause is the language that requires the group to waive its legal right to a jury trial. Trial lawyers know that there are pros and cons to a jury trial versus a bench trial (one presided over by only a judge with no jury), including differences in strategy, time, and cost. Until the nature of the dispute is known, it is difficult to say whether the dispute might best be resolved by a jury trial, bench trial, arbitration, or other dispute resolution method. Why sign away a legal right before a dispute has even arisen? The group will have the opportunity to waive its right to a jury trial later, if it chooses to, fortified with the advice of counsel. It is prudent for the group to consult a lawyer before waiving any legal rights.

Tyra W. Hilliard, Esq.(tyra@mindspring.com), a meetings industry attorney, is assistant professor of meeting and event management at The George Washington University in Washington, D.C.

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