Boilerplate
Dispute resolution process
This clause sets the path for sorting out a fight, and the cheaper, staged versions (talk first, then mediate, then court if needed) suit small suppliers best. Be wary of mandatory arbitration far away or a term making you pay the client's lawyers even if you win, because both can make a valid dispute too costly to pursue. A proportionate, escalating process keeps disputes from becoming ruinous.
What to look for
How disputes are meant to be resolved: informal talks, mediation, arbitration or court. Watch for mandatory binding arbitration in a distant location, or clauses forcing the freelancer to bear the client's legal costs regardless of who wins.
How Clause rates it
RedMandatory binding arbitration in a distant or expensive forum, or a clause making the freelancer pay the client's legal costs win or lose, which can make defending yourself uneconomic.
AmberA process that adds cost or complexity (e.g. arbitration) without clear location or cost-sharing terms, or a one-sided costs provision that should be evened out.
GreenA tiered, proportionate process: good-faith negotiation first, then mediation, before either side goes to court, with each party normally bearing its own costs unless a court decides otherwise.
Wording you can ask for
Suggested redline
Before starting court proceedings, the parties shall attempt in good faith to resolve any dispute by negotiation and then by mediation. Each party bears its own costs unless a court orders otherwise. This clause does not prevent either party from seeking urgent injunctive relief.
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