Umpire Clause

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Definition of 'Umpire Clause'

An umpire clause is a provision in a contract that allows a third party to resolve disputes between the parties to the contract. The umpire is typically a neutral party with expertise in the subject matter of the contract. The umpire's decision is final and binding on the parties to the contract.

Umpire clauses are often used in contracts where the parties are unable to agree on a dispute resolution mechanism. For example, a contract between two companies may include an umpire clause to resolve disputes over the interpretation of the contract. An umpire clause may also be used in a contract between a company and an individual, such as an employment contract.

The use of an umpire clause can help to avoid costly and time-consuming litigation. By agreeing to submit disputes to an umpire, the parties to the contract can ensure that their disputes will be resolved quickly and efficiently.

There are a few things to keep in mind when drafting an umpire clause. First, the clause should clearly define the scope of the umpire's authority. Second, the clause should specify the procedures for appointing an umpire. Third, the clause should set forth the rules that the umpire will apply in resolving disputes.

Umpire clauses can be a valuable tool for resolving disputes in contracts. By carefully drafting an umpire clause, the parties to a contract can ensure that their disputes will be resolved quickly and efficiently.

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