sanjay chapter 7 Busn
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Jan 9, 2024
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ADR is a procedure or combination of procedures voluntarily used to resolve “Issues in Controversy”
without the need to resort to litigation. This may include resloving disagreements about the meaning of
the terms of a contract or the agreement. Governemnet agencies are encouraged to use ADR to the
maximum extent practicable when the dispute cannot be resolved by mutual agreement at the contract
officer level.
ADR techniques includes: -
Here are brief descriptions of each:
Internet-based negotiation: This refers to negotiating through online communication channels,
such as email, chat, or video conferencing. This method can be convenient for parties that are
not in the same location and want to avoid the expense and time of traveling to meet in person.
Mediation: A mediator is a neutral third party who facilitates negotiations between the parties
to help them reach a mutually acceptable resolution. The mediator does not make any decisions
or impose any outcomes, but rather helps the parties communicate and explore options.
Nonbinding arbitration: In this method, an arbitrator hears evidence and arguments from both
parties and makes a recommendation for a resolution. However, the recommendation is not
legally binding, and the parties can choose to accept or reject it.
Binding arbitration: Similar to nonbinding arbitration, an arbitrator hears evidence and
arguments and makes a decision on the dispute. However, in binding arbitration, the decision is
legally binding and enforceable in court.
When to Use ADR
Example 1:
When to Use ADR Imagine two business partners are having a dispute over the
ownership of a joint venture. They have a lot at stake, including their investment, reputation,
and future business prospects. Rather than fighting in court, which can be costly and time-
consuming, they could use binding arbitration as an ADR method. The arbitrator would listen to
both sides and make a final decision on the matter. This approach would likely be more efficient,
less expensive, and less damaging to the business relationship.
When not to Use ADR
Example 2
: When Not to Use ADR Now, let's consider a case where a company is being sued for
fraud by one of its customers. The customer claims that the company misrepresented the
quality of its product, causing financial losses. In this case, ADR may not be a suitable option.
The reason is that fraud allegations can be difficult to resolve through ADR because they involve
accusations of intentional deception and harm. ADR methods, such as mediation or arbitration,
may not be equipped to handle such complex and emotionally charged issues. Instead, litigation
may be a more appropriate method. Litigation allows the parties to present their evidence and
arguments in a formal setting, and a judge or jury can make a final decision based on the facts
and the law.
In the second example, the method that I suggested as an alternative to ADR was litigation. I chose this
method over ADR because fraud allegations can be difficult to resolve through ADR methods, such as
mediation or arbitration. Fraud typically involves intentional deception and harm, which can be difficult
to resolve through negotiation or compromise. Additionally, ADR methods may not have the legal
authority to impose a binding decision on the parties. This can be problematic in cases where one party
refuses to comply with the agreed-upon terms.
Litigation, on the other hand, is a formal legal process that allows both parties to present their evidence
and arguments in court. A judge or jury can then make a final decision based on the facts and the law.
This can be a more effective way of resolving disputes that involve serious allegations, such as fraud.
Litigation also has the advantage of being legally binding, meaning that the parties are required to
comply with the court's decision. This can be important in cases where one party is reluctant to accept
responsibility or comply with an agreement reached through ADR. Finally, litigation can provide a more
transparent and predictable process, with established legal procedures and protections for all parties
involved.
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