CPR Model Master Dispute Resolution Agreements - Litigation

LITIGATION

(Negotiation-Mediation-Litigation)


AGREEMENT dated ____________________ between X Corporation and Y Corporation.

X Corporation and Y Corporation have entered into business agreements in the past and may well enter into further agreements hereafter. These agreements have taken the form of purchase orders, sales orders, negotiated contracts, or ___________________ (“Business Agreements”). Such agreements may lead to disputes that are not resolved by the regularly responsible persons in the normal course of business.

Both companies agree that efforts shall be made to resolve any future dispute arising out of or relating to any past or future agreement between them (the “Dispute”) in an amicable manner, in accordance with the procedures specified hereinbelow.

1. Negotiation 

When a Dispute has arisen and negotiations between the regularly responsible persons have reached an impasse, either party may give the other party written notice of the Dispute. In the event such notice is given, the parties shall attempt to resolve the Dispute promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for the matter. Within [10] days after delivery of the notice, the receiving party shall submit to the other a written response. Thereafter, the executives shall confer in person or by telephone promptly to attempt to resolve the dispute. All reasonable requests for information made by one party to the other will be honored.

2. Mediation 

If the dispute has not been resolved by negotiation within [30] days of the disputing party’s notice, or if the parties have failed to confer within [30] days after delivery of the notice, the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure in effect on the date of this Agreement. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

All negotiations and proceedings pursuant to paragraphs 1. and 2. are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality protections provided by applicable law.

3. Litigation  

If the dispute has not been resolved by mediation as provided herein within 90 days of the initiation of such procedure, either party may initiate litigation, unless the agreement under which the Dispute arose provides for arbitration; provided that if one party has requested the other to participate in a mediation procedure and the other has failed to participate, and their agreement does not provide for arbitration, the requesting party may initiate litigation before expiration of the above period.

Optional language:  

Moreover, a party may file a complaint at any time to establish venue (if the parties’ agreement does not provide for arbitration), or to seek a preliminary injunction or other provisional judicial relief, if in its sole judgment such action is necessary. Despite such action the parties will continue to participate in the procedures specified in this Agreement.

The parties agree that if they engage in litigation, both irrevocably waive (a) exemplary, punitive or any other damages in excess of compensatory damages; and (b) trial by jury.

4. Tolling Statute of Limitations  

All applicable statutes of limitation and defenses based upon the passage of time shall be tolled while the procedures specified in paragraphs 1. and 2. of this Agreement are pending. The parties will take such action, if any, required to effectuate such tolling.

5. Termination of Business Agreement  

This Agreement shall not be deemed a waiver of any right of termination under the Business Agreement out of which the Dispute arose. Unless either party has such a right and has exercised the same, each party shall continue to perform its obligations under such agreement pending resolution of the Dispute.

6. Governing Law  

The law governing the Business Agreement shall govern this Agreement.

7. Governing Agreement  

In the event of a conflict between the provisions of this Agreement and the dispute resolution provisions specified in any Business Agreement entered into before [or after] this Agreement, the provisions of this Agreement shall govern. A clause calling for binding arbitration shall not be deemed in conflict with this Agreement, but the procedures hereunder shall be followed to conclusion before the arbitration clause is invoked.

8. Termination of Agreement
 
This Agreement may be terminated by either party on written notice to the other party as to Business Agreements entered into after such notice is given. Such termination shall not affect any Dispute under any Business Agreement between the parties entered into at any time before such notice was given.

    X Corporation
     
  by ___________________________
     
    Y Corporation
     
  by ___________________________
 
[Note: This form as drafted covers all disputes between the parties. The form may be modified either to limit its coverage to specified types of disputes, or to carve out certain types of disputes. The form also may be modified to cover only disputes arising out of future agreements between the parties.

If this form of agreement is adopted, it may be advisable to include a sentence in future business agreements to the effect that the master dispute resolution agreement between the parties shall apply as to any disputes arising under the business agreement.]