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I am a management consultant in Houston, Texas. I am

designing a contract template for...
I am a management consultant in Houston, Texas. I am designing a contract template for my practice. I want to include an "alternative dispute resolution" paragraph where I indicate that if there is a dispute, the parties of the contract will use a mediator or arbitrator to resolve the issue.I also want to include a paragraph in the contract that limits my liability to the total fees that the client will pay me for my consulting services.Is an "alternative dispute resolution" paragraph in conflict with a "limited liability" paragraph?Thanks,
Charles
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Answered in 1 minute by:
1/20/2017
Richard
Richard, Attorney
Category: Legal
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Hi! My name is Richard & I will be helping you today! It will take me a few minutes to type a response to your question. Thanks for your patience!

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I don't agree with the lawyer's interpretation. An alternate dispute resolution paragraph simply judges a dispute based upon the terms of the contract itself. The alternate dispute process reviews the contract and analyzes the dispute and then rules based on the contract itself. That doesn't negate the parties' right to set parameters of liability should you be the party found to be at fault. I would specifically provide in your alternative dispute provision that is is subject to the parties' agreement on the limitation of liability set forth in that provision. And, as long as the contract is agreed upon by both parties, there would be no conflict and the alternate dispute process would need to render its judgment within the parameters set forth in the contract, including the liability limitation.

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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I just wanted to let you know that I will be away at a meeting for the next hour or so. Should you have a follow up while I’m away, I will address it immediately upon my return. Thank you in advance for your patience. I apologize for any inconvenience.

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Customer reply replied 1 year ago
Richard, exactly what does it mean to say that the alternative dispute resolution "is subject to the parties' agreement on the limitation of liability set forth in that provision"? Please elaborate.
Customer reply replied 1 year ago
Richard, I added a version of the statement you suggested. I show the "resolution" and the "liability" paragraphs below. Do they fit well together?XI. ALTERNATIVE DISPUTE RESOLUTION
To avoid the expense and time of litigation, Consultant and Client will attempt to resolve all disputes outside of the courthouse. If the parties cannot reach a resolution of the dispute through their own efforts, the parties agree to then employ more formal dispute resolution methods. Any disputes connected with this agreement, services, or duties will be brought to mediation within thirty (30) days of the date either party requests mediation in writing. If the parties cannot agree on a mediator, the parties elect to have a mediator provided for them by the American Arbitration Association (A.A.A.) or by Judicial Arbitration and Mediation Services (J.A.M.S.). If mediation does not successfully in resolve the dispute, both parties agree that the matter shall be taken to binding arbitration by a single arbitrator mutually agreed upon by the parties or by an arbitrator selected through A.A.A. or J.A.M.S. Arbitration shall occur within 60 days of the mediation. The results of the arbitration are to remain confidential.The decision and the award that many be determined by the arbitrator will be final and binding upon both parties. All costs and expenses, including attorneys' and experts' fees, incurred as a result of this dispute will be borne by the party determined to be liable.This alternative dispute resolution is subject to the parties' agreement on the limitation of liability set forth below.XII LIABILITY
Consultant’s liability will be limited to the total fees to be paid by Client. Consultant is not liable for consequential damages, lost profits or punitive damages.Charles
Customer reply replied 1 year ago
Hi Richard,Will my liability paragraph likely be enforceable in Texas?Charles

Thanks for following up Charles. In my experience, yes, I think it will likely be enforceable. :)

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Customer reply replied 1 year ago
Richard,Do the paragraphs I sent you work well together?Can you elaborate on the exact meaning of ""is subject to the parties' agreement on the limitation of liability set forth in that provision"?Charles

I believe so. That language means that the the ADR provision is subject to the limited liability provision and thus the ADR arbitrator must honor that provision in the same way it makes a decision based on the rest of the contract.

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Customer reply replied 1 year ago
Hi Richard,Are the content of all paragraphs understandable and adequate for "dispute resolution" and "limiting liability"?Charles

Yes, I believe they are.

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Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

Richard
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Thank you so much for the 5-star rating! I know rating takes an additional step and I truly appreciate you taking the extra time!

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Richard
Richard
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