Negotiation as an Alternative dispute resolution methods in English contract law.... Alternative dispute resolution methods in English and Vietnamese contract law from a comparative pers
The definition and characteristics of contract đispute
Contractual disputes can arise over various contractual arrangements, ranging from those between organizations, companies and consumers to private individuals. These conflicts can have serious financial and legal consequences, including penalties, damages, and reputation damage In order to avoid or resolve contractual conflicts, the parties must carefully negotiate and draft contracts and where appropriate, seek legal assistance.
According to Brown and Marriott’s ADR Principles & Practice, a dispute is "a form of legal conflict, resolved through negotiation, mediation, conciliation or third party settlement." By encompassing multiple avenues for resolution, it emphasizes the adaptability and flexibility necessary for effectively addressing legal conflicts On the other hand while the definition emphasizes the diverse range of resolution avenues available, it may not comprehensively account for certain complex, multi-faceted legal conflicts that require a more tailored or nuanced approach Moreover, the broadness of the definition might lack in addressing the nuances and complexities present in different types of disputes, potentially requiring further elaboration to truly reflect the diverse nature of legal conflict resolution methods Charles Fried a prominent legal scholar and former US Solicitor General, defines a contract dispute as
“a conflict between the parties to a contract concerning their respective rights and obligations mder that contract." He emphasizes the importance of understanding the specific contractual terms and the parties intentions when defining a contract dispute. Fried's definition revolves prim arily around conflicts related to rights and obligations. While this is a significant aspect of contract disputes, it may overlook other potential sources of conflict, such as disputes over contract formation, termination, or other consequential issues.
From legal perspectives, the definition of a dispute can be found in many legal dictionaries, especially cited in Black's Law Dictionary (2TM edition), a dispute is defined as "A conflict or controversy; a conflict of claims or rights; an assertion of aright, claim, or demand on one side, met by contrary claims or allegations on the other"® The definition of a dispute as presented portrays it as a conflict or ll controversy rooted in claims or rights, however, the avowed description may pose limitations in encapsulating the intricacies of contemporary legal disputes This definition's focus on opposing claims and allegations may inadvertently oversimplify the multifaceted nature of legal conflicts Consequently, it runs the risk of excluding the diverse array of dispute scenarios that exist within the legal realm
In conclusion, a contract dispute has the following characteristics:
Mirstiy, a contract dispute takes many different forms in practice It often arises from contract violations This breach can manifest in various forms, such as non- payment, delayed performance, substandard deliverables, or violations of contractual terms, triggering contentious disagreements regarding liability and contractual enforcement However, not all contract violations lead to disputes.
Secondly, a contract dispute need qualify the following elements: () A contractual relationship exists between the parties, (ii) There is a violation of obligations (or alleged violation of obligations) by one party in the relationship, (113) There is a disagreement between the parties regarding the violation or handling the consequences arising from the violation.
Thirdly, classifying types of contract disputes based on the following criteria: the legal nature of the contract; field where contractual relations arise, disputed value and foreign elements in the dispute, etc The classification of contract disputes is significant in choosing the form of dispute resolution and the choice of applicable law Some common examples include disagreements over the terms of the contract, interpretational issues and ambiguities within the contract, particularly in understanding clauses, obligations, or rights, breach of contract, and fraud,
Finally, the legal framework and available remedies heavily influence the dynamics, strategies, and outcomes of contract dispute resolution The legal and remedial framework governing contract disputes plays a pivotal role in shaping the characteristics and resolution strategies of such disputes.
1.2.1 The concep t of disp ute resolution
Dispute resolution is a term used across both commercial and private law and the definition itself is not difficult to arrive at In its most basic form, dispute resolution is the resolution of a dispute between two or more parties Dispute resolution refers to all processes that are used to address disputes It includes all dispute resolution methods and approaches from early resolution through to formal tribunal or court processes Moreover, Dispute resolution is the process through which competent agencies or organizations review relevant documents and evidence to handle civil, marital, and family, business, commercial, and labor disputes and protect the legitimate rights and interests of individuals, agencies, and organizations.”
1.2.2 The concept of contract dispute resolution
Contract dispute resolution specifically involves the selection of competent agencies or organizations by the parties involved in a contractual relationship These agencies or organizations consider and make decisions to resolve conflicts of interest that may arise during the implementation of the contract If the parties are unable to resolve the dispute on their own, a competent dispute resolution agency will handle the matter Overall, contract dispute resolution can be implied as a method employed to address conflicts, disagreements, or breaches of rights and obligations that arise from contractual agreements.
Upon examining the concept of contract dispute resolution, it becomes evident that certain distinct characteristics as follows:
Jn terms of subjects involved the resolution process The primary subjects involved are the parties to the contract, which may include individuals, businesses, or other legal entities bound by the contract terms Legal representation often plays a crucial role in advocating for the parties interests Additionally, mediators or arbitrators are commonly involved in alternative dispute resolution methods, facilitating communication and guiding negotiations to resolve the dispute.
Jn instances of contractual disputes, the applicable law serves as the interpretive framework employed to discern the entitlements and duties of the parties. The dispute resolution clause within the contract outlines the adjudicating authority and procedural guidelines for dispute resolution This clause is important in contracts involving crossborder elements and state entities, often designating the authorized appointee and addressing sovereign immunity Despite its customary inclusion, ambiguity in these provisions can lead to adverse legal consequences for the parties.
In terms of the selection of dispute resolution methods Contract dispute
” Manistry of Justice , Instinte of Legal Sciences (2006), Lem’ Dictioncay, Encyclopedia Publishing House andJudicial Publishing House,p 287.
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Significance of contract dispute resolution
Contract dispute resolution is a critical process for effectively addressing and resolving disagreements that may emerge between parties involved in a contract When disputes arise, having a well-defined process in place becomes essential to ensure feimess and effectiveness in resolving the issues at hand To begin with, it is aimed at resolving the dispute by finding a solution that is agreeable to all parties involved This involves addressing the specific issues that led to the dispute and working towards a mutually satisfactory outcome Another vital objective of contract dispute resolution is the protection of the rights and interests of the parties It focuses on upholding the terms and conditions outlined in the contract, ensuring that all involved parties honor their obligations By addressing breaches or violations of the contract in a fair and appropriate manner, the resolution process underscores the importence of upholding contractual agreem ents, which in tum helps to maintain trust and confidence in the contractual relationship Efficient dispute resolution processes also strive to minimize the costs and time associated with resolving the dispute In many cases, traditional litigation can lead to lengthy, expensive legal battles that can strain resources and prolong the resolution process In contrast, alternative methods can offer quicker and more cost-effective avenues for resolving disputes, allowing the
? Nguyen Thi Hang Nex (2007), Discrusing some issues when ackising on choosing methods of contract clspute resolution, Legal Profession Magazine , Judicial Acadenyy, No 4,p.35 parties to save both time and money while achieving a resolution.
In conclusion, preserving the relationship between the parties is another crucial objective of contract dispute resolution Especially in cases where ongoing business relationships are at stake, resolving the dispute in a timely and fair manner becomes imperative By finding a resolution that satisfies the interests of parties involved, contract dispute resolution can play a vital role in maintaining and nurturing the relationship, allowing the parties to continue cooporate together effectively.
Alternative dispute resolution methods BS Si c9 417261971109 240172 6 1 The definition of alternative dispute resolution m ethods
Classification of alternative dispute resolution methods
Appropriate dispute resolution may take many forms Basically, the intervention of a third party making the decision is at the extreme end of appropriate dispute resolution It is commonly called arbitration There are other forms, including: conciliation, mediation, early neutral evaluation, mini-trials med-arb, arb/med
> ‘Marat Mukdumediyev (2011), Alternative Dispute Resoltaion in Business Contracts, especially mediation clauses, Master Thesis, Falcaty of Lav, Lund Universiy,p.8
* tựnch J Q001), ADR coxd Beyond: A Systems Approach to Conflict Management, Negotiation Jounal,
* J Pirie Andrew (2000), Alternative dlispide resolution: skills, science, coxd the lane, Toronto, kyrin Law.p 5
"© Islam, Sharia 2013), Alternative Dispute Resolution: Mecivouisms for Lege’ Redress in the Muslim
Commuonty, London, UK factfinding rights-based mediation, interest-based mediation, neutral-based mediation.
Generally, ADR maybe classified into three major areas”*:
Negotiation is a method of resolving disputes without the involvement of any state agency or third party It embodies the freedom of agreement and determination of the involved parties Negotiation is only meaningful if the parties truly desire to resolve their dispute and if they are prepared to make at least some concessions Tin most contractual dispute resolution clauses, parties’ stipulate negotiation as the method for resolving disputes in case of contract breaches.
The result of negotiations often comprises commitments and agreements on specific solutions to resolve previously arisen disputes.”*
The advantages of this method include: (3) No requirement for complex procedures; (it) Not restricted by stringent legal procedures; (iii) C ost-effectiveness, (av) Minimal damage to the relationship between the parties, (v) Preservation of business confidentiality Dispute resolution through negotiation often takes place during contract performance (upon occurrence of a violation) or after the contract relationship ends, initiated by one party proposing solutions to resolve impasses or emerging disagreements, leading to negotiations and compramises.
However, the drawback of dispute resolution through negotiation lies in the requirement for both parties to be sincere, honest, and possess a high degree of cooperation, and seemingly, each party may need to "compromise" in order to expect successful negotiations The negotiation outcome entirely depends on the voluntary agreement of each party, so it is not highly regarded in legal terms Furthurmore, if a dispute arises even after a successful negotiation, it may be challenging for a party to initiate legal action, especially in determining the basis for the lawsuit - whether it is due to a contract violation, improper implementation, or failure to fulfill commitments made during the negotiation process Enforcing an agreement reached ằ Kenneth Glamwr 001), Conmact Disputes cod Alternative Dispute Resolution: Some Observations, Advocate (Vancouver Bar Association) 59 Advocate (Vincouver), VoL 59 Part 5,p 725-726. ằ R, Fisher, W L Uy and B Patton (2011), Getting to Tes: Negotiating Agreement without Giving in, Penguin Books,p 56
* Nguyen Thi Khe (1997), Economic Contracts anxd Fors of Economic Dispute Resolution, Dong Nai PolisherHouse, Dong Nai,p 56.
17 through negotiation may also present challenges.
Mediation, akin to negotiation, stands as a chosen method for resolving disputes by the involved parties Differing from negotiation, mediation contains an element of a neutral third party This third party, jointly accepted or designated, acts as a facilitator to guide the parties in reaching suitable solutions to resolve conflicts and put an end to hostilities The mediator is not acting as a judge or counsel and has no power to impose a decision on the parties 29
“Conciliation” is a term that has led to some confusion with “mediation” As the two terms, "mediation" and "conciliation" have come to be used in practice, this distinction is often blurred, and the words used interchangeably Further, where a conciliation service is provided by a court, the process offered may be called mediation 39
Some people, notably those in the building industry, see conciliation as what I shall later describe as mediation, with the conciliator (3) imposing no decision and (b) not even giving an opinion Others, and I refer to the London Common Law and Commercial Bar Association Pilot Scheme proposal, see conciliation as being distinct from mediation in that the conciliator does, ultimately, give an opinion and an assessment as to the likely trial outcome.>! Thus, in this usage, conciliation is the service and mediation is the process used by the service However, the preference for the term "mediation" in this context is twofold Firstly, "conciliation" carries connotations of industrial relations and family matters, whereas "mediation" better conveys the concept of a neutral intermediary facilitating communication and negotiation between conflicting parties.
The method of this resolution offers numerous benefits “44 lack of awareness about the benefits of mediation leads to huge amounts of money being spent by businesses on court proceedings.” “But it is not just about financial and time costs; it’s also about relationship costs Lengthy legal proceedings mean hundreds of
?9 Blacks Lew Dictionary, Sixth Edition (1991)
” Hyde Laurmce M J (1984), “Medianon”, Juvenile & Family Cot Jounal, Law Jounal Lirary- HemOnline,p 57.
`! Akzamder H Bevan (1992), Alternative Dispute Resolution, A LayrytrY Guide to Mediation and other Forms of Dispute Resohtion, Siveet & Maxvtell, London, p 15. thousands of broken commercial relafionships,"32 said Amaldo Abruzzini, Secretary
General of Eurochambers (the Association of European Chambers of Commerce and Industry) First, to avoid the expenses and time commitments associated with legal proceedings Engaging in litigation can impose significant financial burdens on one or both parties, impacting business reputation and access to funding Second, litigants may prioritize non-legal concerns over legal matters For instance, a transportation company discovering a flaw in a recently purchased warehouse may prioritize swift repairs over a lengthy trial, as delays could disrupt operations or lead to loss of contracts.33
Despite the numerous benefits of mediation as a method of resolving disputes, Mediation less formal than arbitration or litigation and is often a preferred route due to this and the cost Mediation is confidential and it gives the parties the chance to agree terms that a court or arbitrator would not be able to do in an arbitral award or court judgment The parties must voluntarily agree to mediate, and they must also agree voluntarily to any settlement agreement A settlement agreement is a legally binding contract meaning that if one party fails to comply with it, legal proceedings can be taken to enforce it However, in our experience once a settlement is concluded at mediation the parties will typically comply with it.
First and forem ost, the history of international commercial arbitration starts with arbitration Wolaver (1934) concluded that the origin of arbitration is lost to obscurity Emerson (1970) came to the same conclusion,Š Keller (1948) reiterate that long before the law was written, or courts were organized, or judges existed men has resulted to arbitration to settle disputes ** Throughout history, most
Vietnamese had access to dispute resolution forms that are more similar to court
Other than court, interestingly, mediation (or form relating to mediation) were being used fairly early and became a part of the norm.>” Mediation was the favorite
`* Đimochambrss (2014), Mediation: a tool for growth, Press release , Brussels,p 9
“ Conmbutng Authors form the Supreme People’s Cout and IFC, Jtudticial Mawal on Artitration and Mediation, Youth Publishing House , Hanoi,p.29.
** Ea] S Wolaver (1934) The Historical backgropxi of aatitration, $3 University of Pawsylvania Layr
`9 Rrank D Emmerson (1970) History of Arixtration Practice and Leow, 19 Cleveland State Lay Reviewr,p 155 © F Rellor & J Angell (1948) American arbitration: its Inistory finictions cand achievements (1st ed.) Harper & Brothers,p 28 ° 1â Minh Tim, Vii Thi Nga (2006), Giáo trinh lich sit nhà rước và pháp luật Điệt Nem, Hanoi Lam
19 alternative dispute resolution method in Vietnamese history, it was even codify in the Hồng Đức Law® 3° England have arguably had the longest history of commercial arbitration as pointed out by Wolaver (1934) with trade gilds’ board of arbitration resolving disputes between members for as early as the 12 century.
Comparing Vietnamese law with the comprehensive and rich history arbitration legislation system of England (coincidently each the pioneer of Common Law and Civil Law) would greatly benefit Vietnam in its strive to perfect its arbitration legislation.
In Vietnam, according to the book “A dictionary of market economy from
A to Z" (which was cited by the Ministry of Justice): "Arbitration is a way to resolve disagreements in industrial relations without bringing up the law or going on sirike "#1 Expanded ơn this, Vietnam International Arbitration Center defined:
“Arbitration, and typically commercial arbitration, is an Alternative Dispute
Resoltition (ADR) which is agreed by parties of the dispute."
ALTERNATIVE DISPUTE RESOLUTION METHODS IN
1.1 The concep t of contract and contract dispute 1.1.1 The definition of contract
A contract is usually associated with a piece of paper through which one buys a house, takes up a jobs or ensures access to mobile phone network, for example. Although these transactions can in most cases indeed be qualified as binding contracts, the law uses a broader definition In any given jurisdiction, contracts are defined as legally binding agreements, irrespective of whether they are written down or not In another perspective, A contract is the legal basis to ensure the implementation of civil exchanges that are taking place more and more excitingly in all areas of social life, binding the parties to the contract that they committed to if they do not want to face comespopdning sanctions lŠ
In the world today, there are generally many different approaches to contracts.
In Richard Austen-Baker’s perspective, a contract is a meeting of the will of the parties, has entailed a number of legal consequences He has suggested that the perpetuation of the idea of "meeting of minds" may come from a misunderstanding of the Latin term consensus ad idem, which means “agreement to the same thing" 6 This subjective approach empahsizes the notion of consent!” and the legal consequence of the contract is to “create an obligation to do or not to do a particular thing” A contract is concluded by means of an abstract process of the “meeting of the wills”!®
The subjective method is a way of understanding contracts where the parties involved have a personal understanding of what they agreed to If two parties entered a contract with different understandings of what the terms meant, the contract would be considered invalid It seems to the author that, nevertheless, this theory of contract
'* Jm MẸ Smits (2021) Conmact law: A Comparative Sutrodivtion, (3°! ed, Cheltenham: Edward Elgar),p 197 ' Nguyên Hien Phuong (2022), Lew on contracts from the perspective of comparative law, People’s Police
!2R Austen-Baker (2002), Gilmore cond the Strange Case of the Failtwe of Contract to Die After All, 19 Jotg?vdl of Contract Law 1 © Dưmcan Fairgrieve (2016), Comparative law in practice: contract law in a mid-cheomel jratsdiction, Oxford;
Portland, Ore gon: Hart Publishing, p 39.
'* Nguyen Hien Phương 2022), supra,p 33-38. focuses on the parties individual beliefs and intentions, rather than an objective interpretation of the contract's terms.
1.12 The definition and characteristics of contract disp ute.
Contractual disputes can arise over various contractual arrangements, ranging from those between organizations, companies and consumers to private individuals. These conflicts can have serious financial and legal consequences, including penalties, damages, and reputation damage In order to avoid or resolve contractual conflicts, the parties must carefully negotiate and draft contracts and where appropriate, seek legal assistance.
According to Brown and Marriott’s ADR Principles & Practice, a dispute is "a form of legal conflict, resolved through negotiation, mediation, conciliation or third party settlement." By encompassing multiple avenues for resolution, it emphasizes the adaptability and flexibility necessary for effectively addressing legal conflicts On the other hand while the definition emphasizes the diverse range of resolution avenues available, it may not comprehensively account for certain complex, multi-faceted legal conflicts that require a more tailored or nuanced approach Moreover, the broadness of the definition might lack in addressing the nuances and complexities present in different types of disputes, potentially requiring further elaboration to truly reflect the diverse nature of legal conflict resolution methods Charles Fried a prominent legal scholar and former US Solicitor General, defines a contract dispute as
“a conflict between the parties to a contract concerning their respective rights and obligations mder that contract." He emphasizes the importance of understanding the specific contractual terms and the parties intentions when defining a contract dispute. Fried's definition revolves prim arily around conflicts related to rights and obligations. While this is a significant aspect of contract disputes, it may overlook other potential sources of conflict, such as disputes over contract formation, termination, or other consequential issues.
From legal perspectives, the definition of a dispute can be found in many legal dictionaries, especially cited in Black's Law Dictionary (2TM edition), a dispute is defined as "A conflict or controversy; a conflict of claims or rights; an assertion of aright, claim, or demand on one side, met by contrary claims or allegations on the other"® The definition of a dispute as presented portrays it as a conflict or ll controversy rooted in claims or rights, however, the avowed description may pose limitations in encapsulating the intricacies of contemporary legal disputes This definition's focus on opposing claims and allegations may inadvertently oversimplify the multifaceted nature of legal conflicts Consequently, it runs the risk of excluding the diverse array of dispute scenarios that exist within the legal realm
In conclusion, a contract dispute has the following characteristics:
Mirstiy, a contract dispute takes many different forms in practice It often arises from contract violations This breach can manifest in various forms, such as non- payment, delayed performance, substandard deliverables, or violations of contractual terms, triggering contentious disagreements regarding liability and contractual enforcement However, not all contract violations lead to disputes.
Secondly, a contract dispute need qualify the following elements: () A contractual relationship exists between the parties, (ii) There is a violation of obligations (or alleged violation of obligations) by one party in the relationship, (113) There is a disagreement between the parties regarding the violation or handling the consequences arising from the violation.
Thirdly, classifying types of contract disputes based on the following criteria: the legal nature of the contract; field where contractual relations arise, disputed value and foreign elements in the dispute, etc The classification of contract disputes is significant in choosing the form of dispute resolution and the choice of applicable law Some common examples include disagreements over the terms of the contract, interpretational issues and ambiguities within the contract, particularly in understanding clauses, obligations, or rights, breach of contract, and fraud,
Finally, the legal framework and available remedies heavily influence the dynamics, strategies, and outcomes of contract dispute resolution The legal and remedial framework governing contract disputes plays a pivotal role in shaping the characteristics and resolution strategies of such disputes.
1.2.1 The concep t of disp ute resolution
Dispute resolution is a term used across both commercial and private law and the definition itself is not difficult to arrive at In its most basic form, dispute resolution is the resolution of a dispute between two or more parties Dispute resolution refers to all processes that are used to address disputes It includes all dispute resolution methods and approaches from early resolution through to formal tribunal or court processes Moreover, Dispute resolution is the process through which competent agencies or organizations review relevant documents and evidence to handle civil, marital, and family, business, commercial, and labor disputes and protect the legitimate rights and interests of individuals, agencies, and organizations.”
1.2.2 The concept of contract dispute resolution
Contract dispute resolution specifically involves the selection of competent agencies or organizations by the parties involved in a contractual relationship These agencies or organizations consider and make decisions to resolve conflicts of interest that may arise during the implementation of the contract If the parties are unable to resolve the dispute on their own, a competent dispute resolution agency will handle the matter Overall, contract dispute resolution can be implied as a method employed to address conflicts, disagreements, or breaches of rights and obligations that arise from contractual agreements.
Upon examining the concept of contract dispute resolution, it becomes evident that certain distinct characteristics as follows:
Jn terms of subjects involved the resolution process The primary subjects involved are the parties to the contract, which may include individuals, businesses, or other legal entities bound by the contract terms Legal representation often plays a crucial role in advocating for the parties interests Additionally, mediators or arbitrators are commonly involved in alternative dispute resolution methods, facilitating communication and guiding negotiations to resolve the dispute.