Imperial could find itself with a sudden, severe decrease in its cash flow. It might also have to layoff employees and have equipment sit idle. Simply put, litigation, regardless of the outcome could do irreparable damage to both parties.
In this case negotiation would be the appropriate form of alternative dispute resolution to pursue. The two parties need to sit down face-to-face. They need to lay out there understanding of the ambiguous clause in the contract, seek common ground, and perhaps by consent share any costs or losses involved in their differing interpretations of the clause. If negotiation proves fruitless they should move to mediation. Then an objective and disinterested third party could assist them in understanding one anothers position and finding a middle ground. (Marsh, 2008)
Due to the complexity of the case collaborative law would be the best approach. The case, too complex for a jury, might also be too complex for a mediator or arbitrator, regardless of their qualifications and experience. Therefore, the parties would be wise to sit down together, with their lawyers accompanying them, and work towards an agreement in camera with trained lawyers, able to understand the complexity of the case. If they were to negotiate in good faith, in this private environment with expert legal advice they stand the best chance of resolving the dispute in a fair manner that also takes account of the legal complexities of the situation. Collaborative law would also ensure that the case never ended up in court.
Collaborative law is “cost effective and discrete”, and with trade secrets involved that is precisely what each party needs. (Newitt, “Shot before dawn”) It is an unusual proposal for a business dispute, but most appropriate in this instance.
In this case it is plain that Empire Corporation wishes to avoid a court case There is the danger of disadvantageous precedent being set if the case does go to trial. Also, the company may find