Abstract

ABSTRACT: This article provides a general overview of the benefits and challenges of using multitiered clauses in international commercial contracts. As international trade grows and parties to international contracts seek speedier and more cost-effective mechanisms for resolving their disputes, it is likely that the use of multi-tiered clauses will increase. While multi-tiered clauses can provide greater flexibility to respond to various types of disputes that may arise in a contractual relationship, these clauses can also present various challenges. The main challenge in utilizing these types of clauses is generally a result of poor or careless drafting. The way in which a multi-tiered clause is structured and drafted can undermine the very benefits that these types of clauses are expected to offer. Keeping this in mind, a well-drafted multi-tiered clause can be tailored to meet the specific needs of a contractual relationship, giving the parties multiple avenues for resolving their dispute. This flexibility can help the parties arrive to a more mutually beneficial resolution of the dispute or in cases where the parties desire a long-term contractual relationship, help preserve that relationship.

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