Earlier this week it was confirmed that the company, Ultimate Fighting Championship (UFC), sold for $5.3 billion dollars. It's a good thing co owners and brothers Lorenzo and Frank Fertitta both agreed to sell. Because if things didn't run so smoothly they might have both ended up fighting against one another (maybe even at the next UFC event!) to determine the fate of the company.
When determining how to solve their disputes, the Fertitta brothers thought outside the box (or should we say cage). They both agreed that any dispute would be resolved by having them fight it out in three five minute rounds of points based jiu jitsu.
Parties have long had the autonomy to determine how they wish to solve their disputes. It wasn't so long ago that parties could solve their disputes via a duel to the death. Obviously that doesn't fly anymore (even Westeros banned it!). But parties can still get creative if they don't want some vanilla mediation or arbitration. If parties want to solve their dispute via robot arbitrator or the toss of a coin, then why not?
You're probably wondering, was the UFC clause valid?
In short, yes. There is no reason why a mutually agreed upon competition can't be considered a legitimate form of dispute resolution, providing that the competition itself isn't illegal. UFC fights might have started off as illegal human cockfights but it is now a global sports empire that is more regulated than Sydney's nightlife.
The fact that the clause was voluntarily accepted by the parties means it would be hard to argue that it was an unfair term. Plus, the Fertitta brothers have fought before, so there are no grounds for unfairness based on nondisclosure of their mad skills.
Due to the sale we will never know if the brothers would have invoked the clause. Was there even a clause dealing with what they would do if trial by jiujitsu becomes impracticable? What if one of them could no longer fight due to health reasons? We're all for creative dispute resolution, but maybe the more appropriate question is not `was the clause valid?' but `was it a good idea?' We don't think you need us to tell you the answer to that.