By Adam Keilen
Short answer. Litigation often involves scrutinized arguments over forum, dispute resolution, and limitation of liability clauses. Bottom line, these provisions are vital and often get glazed over without enough thought and consideration, thus, glazing over these provisions is a common drafting error, small provisions that make a big difference.
Forum selection clause: the parties agree that litigation arising out of the contract will be initiated in a specific forum (location); however, be careful here, some states have specific statutes as to the same; for example, MCL § 445.1527(f) states that “a provision requiring that arbitration or litigation be conducted outside this state” is void and unenforceable.
Dispute resolution clause: the parties to the contract set out a mechanism for the resolution of disputes, thereby avoiding costly legal battles.
Limitation of liability clause: the section of the contract that specifies the damages one party will be obligated to provide to the other under the terms and conditions stipulated to in the contract.
Litigation often involves scrutinizing these provisions – attorneys must be careful to give such provisions the time and attention they deserve.
The take away. Some of the commonly litigated issues arise from what we tend to call “boilerplate” provisions of a contract; be sure the “boilerplate” provisions get the time and attention they deserve, they matter.
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