You may be aware of many of the Nevada and United States laws regarding business contracts. However, when you and a foreign company draft a business contract, the potential for issues arising from the other legal system could be problematic. According to the International Centre for Dispute Resolution, to prevent a dispute from landing you in court in another country, you should consider the benefits of an arbitration clause.

The ICDR follows dispute resolution rules that are accepted worldwide, and are very similar to those of the American Arbitration Association, of which it is a division. Thus, you can include an alternative dispute resolution clause in your contract that requires disputes to go through the process as defined by these international arbitration rules without having to more fully describe what will happen in the event of a conflict. Details include the following:

  •          Jurisdiction
  •          Appointment of arbitrators
  •          Notice requirements
  •          Location where arbitration will take place
  •          Costs
  •          Proceedings if one party does not participate

Some of these factors may be addressed individually and specifically to suit the unique circumstances that you and the other party may encounter. For example, you may agree to the number of arbitrators, and the location and language of the arbitration within the guidelines of the ICDR’s basic clause. You may also include a requirement that any issues should first be addressed through negotiation, and if that fails, mediation. By taking this route, you may be able to save considerable expense and avoid arbitration and litigation.

The ICDR recommends that you and the other party draft the international dispute resolution clause in the contract before you move on to other important details of your negotiations. This information is general in nature, and should not replace the advice of an attorney.