A Terms of Service that specifies governing law but says nothing about how disputes are resolved leaves users without a clear path to bring claims — and leaves you without an agreed process to defend against them. In the EU, the Online Dispute Resolution Regulation (EU-ODR-Reg-524-2013) requires that certain businesses provide an ODR platform link and dispute resolution information. In the US, without an arbitration clause, any user can file a class action lawsuit in their preferred court. Class actions in the US routinely settle for millions regardless of merit, because the cost of litigation exceeds the settlement threshold. A clear dispute resolution clause — even a simple one — substantially reduces this exposure.
Low because the absence of a dispute resolution clause elevates class action risk and removes the predictability businesses need to budget for legal costs.
Add a dispute resolution section near the governing law clause in your Terms of Service. At minimum, specify the process and forum — arbitration, small claims court, or litigation.
## Dispute Resolution
Informal Resolution First: Before filing a formal dispute, contact us at
support@example.com. We will make good faith efforts to resolve issues within 30 days.
Arbitration: If informal resolution fails, disputes will be resolved by binding
arbitration under AAA Consumer Arbitration Rules. Arbitration takes place in
[City, State]. Each party bears their own costs unless the arbitrator awards otherwise.
Small Claims Exception: Either party may bring individual claims in small claims
court within that court's jurisdictional limits.
Class Action Waiver: Disputes are resolved only on an individual basis. You
waive any right to participate in a class action or class-wide arbitration.
Arbitration clauses are legally complex — enforceability varies by jurisdiction and consumer protection law. Have a lawyer review before publishing.
ID: legal-pages-compliance.content-clarity.dispute-resolution
Severity: low
What to look for: Enumerate every relevant item. Find the dispute resolution section in the Terms of Service. It may be combined with the governing law section or standalone. Determine what process is specified: litigation (court), binding arbitration, mediation, or a tiered approach (informal resolution first, then arbitration). For arbitration clauses, check: which arbitration organization is specified (AAA, JAMS, etc.), whether individual arbitration is required (class action waiver), whether the location or seat is specified, and whether there are any carve-outs (small claims court, intellectual property disputes). Note whether a mandatory informal dispute resolution period is specified (e.g., 30 days to try to resolve before filing a claim). Also check for any cooling-off or opt-out period for the arbitration clause.
Pass criteria: At least 1 of the following conditions is met. The Terms of Service specifies how disputes will be resolved — at minimum, naming the governing court or arbitration process and the jurisdiction. Users understand where and how to bring a claim against the service.
Fail criteria: No dispute resolution section exists. The ToS names a governing law but says nothing about how disputes are resolved or where claims can be filed.
Skip (N/A) when: No Terms of Service exists (flagged by tos-exists check above).
Detail on fail: Specify what is missing. Example: "Governing law clause present (Delaware) but no dispute resolution process specified. How and where users bring claims is undefined." or "No dispute resolution section found in Terms of Service.".
Remediation: Add a dispute resolution section. At minimum, this can be a short clause referencing the courts from the governing law section:
## Dispute Resolution
Informal Resolution First: Before filing a formal dispute, you agree to contact us at
support@example.com to attempt to resolve the issue informally. We will make good faith
efforts to resolve disputes within 30 days.
Arbitration: If informal resolution fails, disputes will be resolved by binding
arbitration administered by the American Arbitration Association under its Consumer
Arbitration Rules. Arbitration will take place in [City, State]. Each party bears
their own costs unless the arbitrator awards otherwise.
Small Claims Exception: Either party may bring an individual action in small claims
court for disputes within that court's jurisdictional limits.
Class Action Waiver: Disputes will be resolved only on an individual basis. You
waive any right to participate in a class action lawsuit or class-wide arbitration.
Arbitration clauses are legally complex and their enforceability varies significantly by jurisdiction and consumer protection law. Review with a lawyer before publishing.