When concluding agreements, partners agree on rights and obligations. One partner provides a product or service, and the other partner pays for it. There can be disputes between partners about the quality of the products and services provided, and whether or not to pay. Such debates may escalate if:
- there is uncertainty about the authority of party representatives;
- there is a lack of clarity under which general terms and conditions contracts have been concluded;
- there is uncertainty about the rights and obligations in the contracts; or
- there is uncertainty as to whether or not they have been supplied or paid for the products and services
A high-level dispute disrupts relations between the parties. It is sometimes a reason to end the relationship.
The cost of finishing a dispute can also be high. First of all, it seizes the capacity of the organisation; then there are costs for lawyers and mediators, and the outcome of settling a dispute is uncertain.
Dispute resolution based on mediation
MYOBI recognises an opportunity for disputes with users of the MYOBI Trust Network over the fulfilment of the mutual obligations of the TTP policy. This risk of litigation also exists if a company concludes processing and consent agreements with its partners.
The best way to settle disputes is to avoid conflicts. If there are unexpected differences of opinion, we must be able to react quickly with a dispute resolution that is effective and cost-effective for the parties. We maintain the following measures in the contract cycle, avoiding or resolving disputes:
- Build and maintain resilient contract portfolio;
- Contractmanagement; and
- Dispute resolution.
We discuss the phases and indicate how MYOBI facilitates the users of the trust network.
A. Build and maintain resilient contract portfolio
MYOBI uses smart contracting to conclude agreements and makes smart contracting available to its users. Before MYOBI can use smart contracting, it has put together a contract portfolio, in collaboration with lawyers of First Lawyers. The MYOBI contract portfolio consists of:
- TTP Policy with all underlying agreements. MYOBI agrees the TTP policy with all its users;
- Processor agreements as referred to in the GDPR. Users can agree and record processor agreements or data exchange agreements with its partners in the Information Ecosystem;
- Consent agreements that provide a basis for the processing of company personal data. Users submit these agreements to their partners; and
- Mediation agreements. These agreements apply a user and its partners when settling disputes.
The lawyers of First Lawyers and the legal professionals of MYOBI maintain the contract portfolio. Legislation, business conditions and perceived ambiguities among users of the MYOBI Trust Network may lead to a change in the contract portfolio. Sometimes this has consequences for agreements already made between the parties. MYOBI supports the process of transferring of already made agreements.
Being able to manage the contract portfolio in a controlled manner offers companies the comfort of removing ambiguities about the explanation of rights and obligations in contracts. MYOBI then notices and deposits the contracts.
In contracts, with the help of smart contracting, the process of contracting is central. The initiating party appoints a Business process coordinator who can start a process of contracting. The process coordinator involves relevant employees and any external experts in the process and opens up contract types for discussion. If there is consensus and the signing authority of the company agrees with the contract types, then the process coordinator invites a business process coordinator of the accepting party to participate in the contracting process. The process coordinator of the accepting party invites the competent persons to participate in the contract process and negotiations between the parties begin.
If the parties agree to the contracts, the process coordinators invite the signing authority to sign the agreements with their electronic signatures.
MYOBI derives the identity of its users from authentic sources such as the Chambers of Commerce. MYOBI authenticates the identity of the representative authorities, provides them with an electronic signature and asks the persons to sign the TTP policy.
The contracting process takes place on the MYOBI Trust Network. MYOBI, in the role of the notary, records the pre-contractual phase and, once the users have signed the action, MYOBI observes and deposits the contracts in the file with the pre-contractual phase. Of course, this data is only accessible to the partners.
The controlled process of contracting offers companies comfort from removing ambiguities about the identity of companies, the legal capacity of representatives, applicable general terms and conditions, file-setting of agreements made, and assurance that retrospective compelling evidence about the agreements made is accessible.
The life of a contract may vary. It depends on the obligations and rights agreed. It captures the imagination that parties want to receive timely information about the expiration of the agreement. In addition, we distinguish a range of situations that are important for parties to take action.
A contract management process, in which company rules go off and start activities, forms the foundation for contract management. Managing the company’s rules, and organizing the appeal of rights and signalling obligations, prevents nasty discussions with partners afterwards.
D. Dispute resolution
Organising points A, B, and C ensures that MYOBI manages to keep the number of disputes with parties as low as possible. If disputes do arise, MYOBI acts decisively and quickly to prevent escalation. MYOBI uses dispute resolution based on mediation that is included in smart contracting.
We recognise the following steps:
Step 1: Business process coordinator starts a process of mediation. In the process, the process coordinator involves the applicant for mediation, relevant employees and possibly external expertise. The process coordinator incorporates the set of documents mediation into the process. Using the application document, the applicant describes the issue in which, among other things: (1) the reference is included to the contract with rights and obligations and (2) the facts of non-compliance with the obligations by the counterparty. Next, the process coordinator invites the Business process coordinator of the counterparty to participate in the mediation process;
Step 2: The Business process coordinator of the counterparty involves relevant employees in the mediation process. With the help of a document, the counterparty gives its views on the application;
Step 3: Often, by comparing the application and the point of view, the parties reach an amicable settlement. A document is also included in the portfolio for this purpose;
Step 4: There is a chance that the parties will still want to enter a process of mediation. The Rules of Mediation provides for this.
A controlled dispute resolution process, as the culmination of the contract life cycle, gives users on the MYOBI Trust Network the comfort of working together effectively. It is possible to apply smart contracting for your own legal operations.