Resolving Business Disputes: Arbitration, Mediation, and Litigation

Dispute Resolution Methods

There are several ways to resolve disputes:

• Mediation: A voluntary, nonbinding conciliation process.
• Arbitration: A more formalized process resulting in a binding award that courts in many countries will enforce. Parties must agree to arbitration, and once they do, they cannot withdraw.
• Litigation: The final step in attempting to resolve a dispute.

Legal Concepts in Litigation

• Jurisdiction: The power of a court to hear and decide a case.
• In Personam Jurisdiction: Refers to the court’s power over a specific individual or corporation.
• Venue: The geographical location of a court with competent jurisdiction where a case can be heard.

Legal Doctrines and Clauses

• Forum Non Conveniens: Whenever a case can be properly heard in more than one jurisdiction, it should be heard in the most convenient one.
• Conflict of Laws: Rules by which courts determine which state or country’s laws apply to a case and how to reconcile differences between laws.
• Forum Selection Clause: A contract provision that predetermines the jurisdiction where disputes will be litigated.
• Choice of Law Clause: A contract provision stipulating which country or jurisdiction’s law will apply in interpreting or enforcing the contract’s terms.

International Sales and Contracts

• CISG (Convention on Contracts for the International Sale of Goods): Governs the international sale of goods.
• Force Majeure Clause: Excuses a party from performance due to specified events like plant closings or natural disasters.

Contract Law Principles

• Unless otherwise agreed, sellers must deliver goods fit for ordinary purposes and any particular purpose made known to the seller.
• The UCC covers insurance contracts and contracts for services. (TRUE)
• Provisions concerning express and implied warranties are similar under the UCC and CISG. (TRUE)
• International sales contracts for consumer goods sold for personal use do not come under CISG. (FALSE)

International Sales Scenarios

Both the US and France have ratified the CISG. If a buyer in France and a seller in the US enter into a contract for the sale of widgets and a dispute arises:

• A) The CISG will apply since all the requirements have been met.

If a US buyer wants to avoid a sales contract with an Italian Seller, the CISG states that the US buyer:

• Can avoid the contract only if there has been a fundamental breach by the Italian seller.