Are student exchange agreements legal?

There is a view that student exchange agreements are legally-enforceable, and that serious disputes could end up in court. That view leads towards highly legalistic framing of the agreement, and the university lawyers have endless fun making sure that all of the legal bases are covered.  There is another view that student exchange agreements are more or less simple affirmations of trust between partner institutions, and that disputes will be resolved by discussion.  

Has anyone had experience of settling disputes between institutions?  Has any institution ever, anywhere, taken another to court?

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