Estimated reading time: 2 minutes

Resolving disputes efficiently is crucial for maintaining professional relationships and ensuring contract performance. A well-structured Contract Dispute Resolution Procedure can address disagreements and avoid prolonged conflict. This article outlines a typical process for managing disputes in contracts.

Negotiation: The First Step of Contract Dispute Resolution

Parties must prioritize resolving disputes through direct negotiation. Open communication is vital during this stage to exchange relevant information. Both parties should disclose necessary documents without prejudice to facilitate mutual understanding. Negotiations help address issues early and reduce the need for formal proceedings.

Mediation: A Collaborative Approach

If negotiations fail, parties can appoint a Project Mediator to assist in resolving disputes. Both parties jointly select the mediator or request a professional body to appoint one. The mediator reviews all records and facilitates good-faith discussions. Mediation is non-binding, and the cost is equally shared. This process ensures a collaborative resolution while preserving relationships.

Arbitration: The Final Resolution

When the Contract Dispute Resolution Procedure remains unresolved, arbitration serves as the ultimate step. Parties refer disputes to an arbitral tribunal under applicable arbitration laws. A single arbitrator handles cases involving technical issues during ongoing work.

For broader disputes, a three-member panel ensures balanced representation. Arbitration offers a legally binding decision, providing finality to the resolution process.

Benefits of a Clear Procedure

A structured dispute resolution procedure prevents delays, reduces litigation costs, and promotes fairness. It encourages timely resolutions, preserves business relationships, and ensures adherence to contract terms.

Check out more pages of our website for related content:

• Arbitration Agreement
• International Judicial & Arbitration Bodies
• Contract Termination Agreement
• Contract Termination Announcement
• Project Close-Out Report
• Close-out Agreement

Access the Full Contract Directory Index

You can browse the complete alphabetical list of all commercial, financial, and project-based contract templates by visiting our A–Z Contract Index.

References

• The Law Society – What does 2025 hold for dispute resolution? – Examines 2025 trends including the impact of AI on litigation costs and the judiciary’s increasing focus on mandatory mediation.
• Cliffe Dekker Hofmeyr – The dispute resolution process explained – A 2025 guide detailing the procedural stages of arbitration and conciliation, from preliminary hearings to final binding awards..