Dispute Resolution Agreement (Mediation + Arbitration)
Standalone dispute resolution agreement with multi-step process: negotiation → mediation → binding arbitration; AAA or JAMS rules; class-action waiver where permitted.
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DISPUTE RESOLUTION AGREEMENT
Effective: May 11, 2026
PARTY A: Northstar Logistics, Inc.
500 W Madison St, Chicago, IL 60661
PARTY B: Pacific Cloud Solutions, LLC
925 NW 19th Ave, Portland, OR 97209
This Dispute Resolution Agreement ("DRA") supplements Master Services Agreement dated 2026-01-15
("Underlying Agreement") and governs the resolution of disputes
between the parties.
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1. SCOPE
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1.1 This DRA applies to any dispute, claim, or controversy arising out
of or related to the Underlying Agreement, the parties' relationship,
or the breach, termination, or validity of the same ("Dispute"),
including disputes about the formation or scope of this DRA itself.
1.2 Excluded matters: (a) injunctive relief in any court of competent
jurisdiction for IP infringement, breach of confidentiality, or other
matters where money damages are inadequate; (b) small-claims court
matters within the jurisdictional limit; (c) statutory whistleblower
claims that may not be arbitrated by law; (d) sexual-harassment and
sexual-assault claims, at the election of the claimant per Pub. L.
117-90 (Ending Forced Arbitration of Sexual Assault and Sexual
Harassment Act of 2021); (e) claims that may not be subject to
pre-dispute arbitration under applicable state law (subject to
federal preemption analysis under the Federal Arbitration Act).
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2. STEP 1 — INFORMAL NEGOTIATION
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Before initiating formal dispute resolution, the disputing party
shall send written notice to the other party describing the dispute
in reasonable detail. Within 30 days of notice, senior executives of
each party (with authority to settle) shall meet in person or by
video conference and attempt in good faith to resolve the dispute.
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3. STEP 2 — MEDIATION
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If informal negotiation fails, the parties shall attempt mediation
before a single mediator selected by mutual agreement (or, failing
agreement within 14 days, appointed by AAA or JAMS).
Mediation IS REQUIRED before arbitration may be initiated.
The mediation shall:
(a) Take place at a mutually agreeable location or by video.
(b) Be conducted under the AAA Commercial Mediation Procedures
or JAMS International Mediation Rules at the parties' choice.
(c) Last no more than 30 days from appointment of mediator unless
extended by mutual agreement.
(d) Be confidential. Statements made and documents created in
mediation are inadmissible in subsequent arbitration or
litigation, per Federal Rule of Evidence 408 and analogous
state rules.
(e) Have its costs (mediator fees) split equally; each party bears
its own fees and expenses.
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4. STEP 3 — BINDING ARBITRATION
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4.1 Arbitration. If the dispute is not resolved through Steps 1-2,
either party may initiate binding arbitration.
4.2 Rules. AAA Commercial Arbitration Rules.
4.3 Number of Arbitrators. Single arbitrator (claims under $1M); three-arbitrator panel (claims over $1M).
4.4 Location. Wilmington, Delaware (or such other location as the parties agree).
4.5 Federal Arbitration Act. This arbitration is governed by the
Federal Arbitration Act, 9 USC § 1 et seq. The FAA preempts any
inconsistent state law.
4.6 Discovery. Limited discovery as the arbitrator(s) deem
appropriate, mindful of efficiency and proportionality. Each party
may take 1-2 fact depositions and exchange focused document requests.
The full discovery framework of the Federal Rules of Civil Procedure
does not apply.
4.7 Hearing. The arbitrator(s) shall hold a hearing within 6 months
of appointment, unless extended for good cause. The hearing shall
include opening statements, witness testimony, exhibits, and closing
arguments.
4.8 Award. The arbitrator(s) shall issue a written, reasoned award
within 30 days of the close of the hearing. The award shall include
findings of fact and conclusions of law.
4.9 Remedies. The arbitrator(s) may award any remedy available under
the substantive law governing the Underlying Agreement, except:
(a) punitive damages are NOT available; (b) consequential damages
are subject to any limitation in the Underlying Agreement.
4.10 Enforcement. The award is final and binding. Judgment on the
award may be entered in any court of competent jurisdiction. Limited
review is available under 9 USC § 10 (e.g., fraud, evident partiality,
arbitrator misconduct, exceeding power).
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5. CLASS ACTION WAIVER
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Mutual waiver of class actions (subject to enforceability per state law)
To the extent permitted by law, each party waives any right to
participate in a class action, collective action, or representative
action against the other. Disputes shall be resolved on an individual
basis.
State-law and federal-law caveats:
(a) NLRA — In employment disputes, certain concerted-activity claims
cannot be subject to class waiver per the National Labor
Relations Board's reading of NLRA §7. The Supreme Court in Epic
Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018), generally upheld
class waivers in employment arbitration but the NLRA carve-out
remains relevant.
(b) PAGA — California PAGA representative actions cannot be waived
in arbitration under Iskanian v. CLS Transportation, 59 Cal. 4th
348 (2014); Viking River Cruises v. Moriana, 596 U.S. ___ (2022)
permitted some PAGA claims to be sent to arbitration, with
ongoing development.
(c) Sexual-harassment / sexual-assault — Pub. L. 117-90 (2021) gives
claimants the option to litigate in court regardless of pre-
dispute arbitration agreement.
(d) State consumer-protection law — some states limit pre-dispute
arbitration in specific consumer contexts (e.g., motor-vehicle
franchises, residential rental); FAA preemption analysis applies.
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6. CONFIDENTIALITY
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The existence, conduct, and content of any dispute resolution
proceeding under this DRA shall be confidential to the extent
permitted by law. Award disclosure to enforce or vacate is permitted.
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7. STATUTE OF LIMITATIONS
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The applicable statute of limitations for any underlying claim is
NOT extended or tolled by the existence of this DRA. The disputing
party must initiate Step 1 (Notice) within the limitations period.
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8. INJUNCTIVE RELIEF
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Notwithstanding the multi-step process, either party may seek
preliminary or permanent injunctive relief in any court of competent
jurisdiction for:
(a) IP infringement.
(b) Breach of confidentiality.
(c) Other matters where money damages are inadequate and irreparable
harm is threatened.
Seeking injunctive relief in court does not waive the right to
arbitrate the underlying dispute.
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9. FEES AND COSTS
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Each party bears own fees; arbitration costs split equally; arbitrator may award fees to prevailing party
Where consumer or employee disputes are involved, the AAA Consumer
or Employment Rules cap the consumer/employee filing fee at a
nominal amount; the company pays the remainder regardless of outcome.
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10. SEVERABILITY
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If any provision of this DRA is held unenforceable, it shall be
severed and the remainder shall continue in effect, except that if
the class-action waiver is held unenforceable as to a particular
claim, that claim alone shall proceed in court (the rest of the
dispute remains in arbitration). This provision is critical to
preserve enforceability of the arbitration clause separately from
the class waiver per Lamps Plus Inc. v. Varela, 587 U.S. ___ (2019).
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11. GOVERNING LAW
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The substantive law governing the Underlying Agreement governs
disputes. Procedural matters are governed by the Federal Arbitration
Act (9 USC § 1 et seq.). Where state law applies, the law of the
State of Delaware applies, without regard to its
conflict-of-laws principles.
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12. SURVIVAL
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This DRA survives termination of the Underlying Agreement and
applies to any Dispute arising out of or related to the Underlying
Agreement, regardless of when discovered.
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13. ENTIRE AGREEMENT; AMENDMENT
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This DRA, together with the Underlying Agreement, constitutes the
entire agreement of the parties on the subject of dispute resolution.
This DRA may be amended only by a writing signed by both parties.
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SIGNATURES
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PARTY A: Northstar Logistics, Inc.
By: _____________________________________ May 11, 2026
Devon Patel — Chief Operating Officer Date
PARTY B: Pacific Cloud Solutions, LLC
By: _____________________________________ May 11, 2026
Lisa Brennan — Managing Director Date
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NOTICE: BY SIGNING THIS DISPUTE RESOLUTION AGREEMENT, EACH PARTY
GIVES UP THE RIGHT TO HAVE DISPUTES DECIDED BY A COURT OR JURY (FOR
ARBITRATED MATTERS) AND THE RIGHT TO PARTICIPATE IN A CLASS ACTION
(WHERE THE WAIVER IS ENFORCEABLE).
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About this template
A Dispute Resolution Agreement (DRA) is a standalone contract — or a section embedded in a larger contract — that defines the procedure for resolving disputes between the parties without immediate resort to litigation. Modern DRAs typically use a multi-step or "tiered" approach: (1) Informal negotiation between senior executives — quick, cheap, often resolves operational disputes without escalation. (2) Mediation — facilitated negotiation by a neutral third party; non-binding; preserves the relationship; settlement rate around 70-85% per various surveys. (3) Binding arbitration — a private adjudication that produces an enforceable award. The advantages of this structure: (a) speed — disputes resolve in 6-18 months vs. 2-5 years for litigation; (b) cost — typically 30-60% of full litigation costs; (c) confidentiality — proceedings and award are private (court filings are public); (d) expertise — arbitrators often have subject-matter expertise (commercial, IP, construction, securities) that judges may lack; (e) finality — limited appeal rights mean once decided, it's done; (f) flexibility — procedure can be tailored. The disadvantages: (a) limited discovery — may favor party with more information; (b) limited appeal — even if the arbitrator gets the law wrong, you generally cannot appeal; (c) cost can still be high (arbitrator fees on top of attorney fees); (d) less predictable than court precedent; (e) "split-the-baby" tendency. Federal Arbitration Act (FAA, 9 USC § 1 et seq., enacted 1925) is the foundational federal statute. Section 2 declares written arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." The Supreme Court has repeatedly held the FAA preempts state laws that single out arbitration agreements for unfavorable treatment (AT&T Mobility v. Concepcion, 563 U.S. 333 (2011); American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013)). Class action waivers in arbitration agreements are generally enforceable post-Concepcion, with the major employment carve-out from Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) which upheld waivers in employment arbitration over NLRA-based objections. Sexual-harassment and sexual-assault carve-out: the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (Pub. L. 117-90, codified at 9 USC §§ 401-402) gives claimants the option to litigate sexual-harassment and sexual-assault claims in court regardless of pre-dispute arbitration agreements. The Act applies to disputes arising on or after March 3, 2022. Subsequent legislation has been proposed to extend similar carve-outs to other categories (race discrimination, etc.) but as of 2026 only sexual-harassment/assault carve-outs are federal law. State-level arbitration restrictions: California has a complex arbitration jurisprudence — Armendariz v. Foundation Health Psychcare Services, 24 Cal. 4th 83 (2000) requires "minimum requirements" for employment arbitration (neutral arbitrator, more than minimal discovery, written award, all remedies available in court, employer pays unique-to-arbitration costs); Iskanian v. CLS Transportation, 59 Cal. 4th 348 (2014) held PAGA representative claims cannot be waived; Viking River Cruises v. Moriana, 596 U.S. ___ (2022) partially preempted Iskanian, allowing some PAGA arbitration with carve-outs. The result is a complex compliance landscape for California employment contracts. Other states (NY, NJ, MD, others) have enacted or are considering arbitration restrictions for sexual-harassment, employment, and consumer claims. Federal Click-to-Cancel Rule and similar consumer-protection regulations add further wrinkles to consumer arbitration. Substantive design choices: (1) Tiered vs. direct — most modern DRAs use tiered (negotiation → mediation → arbitration); some use direct (skip negotiation/mediation). Tiered DRAs filter out disputes that can be resolved quickly. (2) Mediation required vs. optional — required mediation creates discipline but adds delay; optional mediation creates flexibility but may be skipped when it would help. (3) Arbitration rules — AAA Commercial (default for B2B), JAMS Comprehensive (similar, more flexible), AAA Consumer (consumer disputes, capped consumer fees), AAA Employment (employment disputes, capped employee fees), ICC (international). The choice affects cost, procedure, and appeal rights. (4) Number of arbitrators — single arbitrator for routine disputes; three-arbitrator panel for high-value disputes ($1M+); panels are more expensive but more reliable. (5) Location — typically the governing-law state's major commercial city. (6) Discovery — full FRCP discovery is rare in arbitration; arbitrators typically allow 1-2 depositions per side and focused document requests. (7) Class waiver — yes for B2B and most B2C; carve-outs as discussed. (8) Confidentiality — typical. (9) Fee allocation — American rule (each pays own) for most B2B; English rule (loser pays) for some specialized contracts. The arbitrator is typically given discretion to shift fees to a prevailing party. (10) Severability — critical. If the class waiver is held unenforceable as to a particular claim, the rest of the arbitration agreement should survive — this is the lesson of Lamps Plus Inc. v. Varela, 587 U.S. ___ (2019). Best practice: (a) tiered process with required mediation; (b) AAA or JAMS rules; (c) class waiver with proper severability; (d) carve-outs for IP injunction, sexual harassment, statutory whistleblower; (e) explicit FAA preemption invocation; (f) clear severability; (g) annual review for state-law and federal-law changes.
When to use it
- Adding dispute resolution to an existing services agreement.
- New B2B commercial contracts.
- Updating existing DRAs for FAA developments and state-law changes.
- Adding class waiver to consumer or employment contracts.
- After litigation has revealed weaknesses in existing dispute mechanism.
- When updating multi-party agreements to align dispute provisions.
What to include
- Identification of parties and underlying agreement.
- Scope of disputes covered (and excluded matters).
- Step 1: informal negotiation between senior executives.
- Step 2: mediation (required or optional) under AAA/JAMS rules.
- Step 3: binding arbitration with rules, location, number of arbitrators.
- Federal Arbitration Act invocation.
- Discovery framework (limited).
- Class action waiver (with state/federal carve-outs).
- Confidentiality provision.
- Statute-of-limitations preservation.
- Injunctive relief carve-out for irreparable-harm cases.
- Fee allocation.
- Severability (class waiver severable from arbitration).
- Survival beyond underlying agreement termination.
- Signatures of authorized parties.