Alternative Dispute Resolution (ADR)

In one sentence

Methods of resolving disputes outside traditional court litigation, such as arbitration, mediation, or negotiation.

Plain English

Alternative dispute resolution (ADR) is an umbrella term for any process that resolves a conflict without going to court. The most common forms are arbitration (where a private decision-maker rules on the dispute) and mediation (where a neutral person helps the parties reach their own agreement), but ADR also includes negotiation, conciliation, and other creative approaches. ADR is often faster, cheaper, and more private than litigation, and it can preserve business relationships. Many modern contracts include ADR clauses requiring parties to use these methods before filing a lawsuit.

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Example

A construction contract includes an ADR clause requiring disputes to first go through mediation, then arbitration if mediation fails, before either party can file a lawsuit. This saves both parties time and money compared to going straight to court.

Used in a sentence

“The parties agreed to use alternative dispute resolution to settle their contract disagreement without going to trial.”

Related terms

Arbitration

A private dispute resolution process where an impartial third party (arbitrator) hears evidence and makes a binding decision instead of going to court.

Mediation

A dispute resolution process where a neutral third party (mediator) helps the parties negotiate and reach their own settlement agreement.

Contract

A legally binding agreement between two or more parties to do or not do something.

Remedy

A legal action or payment a court awards to fix a harm or enforce a right after a breach.

Forum Selection Clause

A contract provision specifying which court or jurisdiction will hear any disputes between the parties.

Choice of Law Clause

A contract provision stating which state's or country's laws will govern the interpretation and enforcement of the agreement.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.