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Application of alternative dispute resolution in business: its advantages.

Alternative dispute resolution refers to the settlement of matters out of court. The advantages of alternative dispute resolution mechanisms are that it encourages peaceful settlement of disputes between parties. Alternative dispute resolution mechanisms also help in reducing the backlog of cases in court. Moreover, in alternative dispute resolution, each party is a winner since they can negotiate the process and, at the time, the solution to the existing problem. Arbitration is the main form of dispute resolution mechanism in business. Arbitration refers to the process where the parties refer a dispute to one or more arbitrators who will give a binding decision upon the two parties to the conflict. The parties themselves choose the arbitrator(s) characteristics of arbitration include, it is consensually agreed by the parties, and the arbitrator is a neutral party, the arbitration process is confidential, and the award given by the arbitral tribunal is binding and enforceable on the parties (Alternative Dispute Resolution, WIPO).

What are the four types of alternative dispute resolutions?

Negotiation, mediation, arbitration, conciliation are the main form of dispute resolution mechanisms. Negotiation is a form of dispute resolution mechanism that refers to the direct or indirect communication taken by the parties to a conflict where they discuss the possible joint action to take and manage their dispute (Goldberg et al., 1992). Mediation is a dispute resolution mechanism where a neutral third party helps the parties solve their conflict through constructive debating, discussion, and negotiation. In mediation, the neutral third party must support the parties arrive at a mutually acceptable resolution. Arbitration is a method of dispute resolution that is mainly used in commercial transactions. The parties in arbitration of their own volition refer the dispute to an arbitral tribunal that they have both agreed on. The arbitral tribunal delivers an award that is legally binding and enforceable on the parties. Conciliation is a dispute resolution mechanism where a neutral third party helps the conflicting parties through negotiations to arrive at an amicable settlement favorable to both parties.

What constitutes a frivolous lawsuit in civil law?

A tort is a private wrongful act that one person does to another. The unlawful act may be done either through omission or commission where the other person suffers harm due to the unlawful act. The person who commits the wrongful act acquires legal liability. Negligence, Defamation, Nuisance, and Intentional torts are examples of legal torts. The torts classified under intentional torts are assault, false imprisonment, battery, and the deliberate infliction of emotional distress and turmoil on a person. A frivolous lawsuit is a suit, motion, or appeal that is made in bad faith. In most cases, it is made with the intent to harass, embarrass the other party or delay the court’s process. In (Neitze v Williams, 1989), the court held that a lawsuit lacking a factual basis and is merely based on allegations, delusion, or fantasy is frivolous and should be dismissed by the court.

Are Contracts with minors enforceable?

In most states, a person below the age of 18 years is considered a minor. The general rule regarding minors and contracts is that contracts made by or with minors are unenforceable. This is because minors cannot enter into legally binding agreements. However, there are exceptions to the general rule regarding the unenforceability of contracts made with minors. The first exception is contracting for necessaries. The court in (Nash v Inman, 1908) states that a minor who contracts for necessaries and has the necessities delivered must pay a reasonable price for the goods. The second exception is contracts made for the benefit of the minor. An agreement made for the minor’s use may include arrangements for education, service, or apprenticeship. In (De Francesco v Barnum, 1890), the court held that the contract must be solely for the benefit of the minor for it to be enforceable.

Significance of restraint of trade clauses in agreements

Restraint of trade is an agreement entered into between an employer and an employee or between a buyer and a seller regarding trading activities within a specified geographical location (Bartholomae C, 1923). The restraint may take the form that an employee should not engage in any business that seems to compete with the employer’s business within the exact geographical location for a specified period. Essentially, restraint of trade limits the freedom to conduct business. According to Judge Smith in (Mitchel v Reynolds, 1711), a trader should be free to work and take part in business in the country as long as the general law does not restrain his conduct. No power should control the behavior of business aside from the general rule of the land. A contractual agreement on restraint of trade is unenforceable if it is contrary to public policy.

Various types of remedies available for breach of contract

Breach of contract occurs where one party to the contract through commission or omission fails to fulfill his contractual obligations. The elements required to establish a breach of contract are; the existence of a valid agreement between the two contracting parties, the defendant’s non-performance of his contractual duties, a justification for the plaintiff’s non-performance, and a loss suffered by the plaintiff as a result of the defendant’s breach. In (Western Distributing Company v Diodosio, 1992) held that a plaintiff suing for breach of a contract must prove the existence of the four elements of a breach to recover damages. The types of breach of contract are minor breach, material breach, actual breach, and anticipatory breach contract. The remedies for breach of contract are specific performance, an award of damages, restitution, rescission of the contract, and injunctions.


List of Cases

De Francesco v Barnum (1890) 45 ChD 430.

Mitchell v Reynolds (1711) 1 P Wms 181.

Nash v Inman (1908) 2 KB 1.

Neitze v Williams (1989) 490 U.S. 319, 325.

Western Distributing Company v Diodosio (1992) 841 P. 2d 1053.


S.G. Goldberg; E.A. Frank; N.H. Rogers (1992) Dispute Resolution: Negotiation, Mediation, and Other Processes, (2nd ed.) Boston: Little, Brown, and Company, 3.


Back Matter. (1923). The University Journal of Business, 1(4). Retrieved July 22, 2021, from


What is Arbitration? Doi <> at July 22, 2021.

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