Mediation Contract Clause

Adding a Mediation Clause to

Your Business Contracts

Mediation represents what is technically known as, "alternative dispute resolution." It is an alternative to litigation as a means of resolving disputes. Mediation can be defined as a process that brings parties in conflict together to work with an independent and impartial mediator. The mediator assists the disputing parties to reach an agreement of their own making.

Business owners have little to lose and much to gain if their contracts include a mediation clause. This clause assures that the parties attempt to resolve their differences through mediation instead of immediately entering the legal system. The time, money, and aggravation saved by resolving disputes in this user-friendly process may be quite significant. (For a review of the benefits of mediation over litigation, click here).

The following paragraph is an example of a mediation clause.

The Process for Resolving Disputes

If a dispute arises over the terms and conditions of this contract and the parties are unable to resolve the matter on their own, they agree to make a good faith attempt to resolve their differences through mediation prior to initiating legal proceedings with any court.

To expedite this process, the parties agree to first consider utilizing the services of conflict resolution specialist, Dr. Kenneth C. Newberger (Ph.D., Conflict Analysis and Resolution) of Win Win Conflict Solutions. The parties will take the opportunity to contact and learn more about Dr. Newberger and his win/win mediation process. If, for any reason, a party is unwilling to use Dr. Newberger's services, or if he is unavailable to begin his services within 15 business days after being contacted, the parties will seek to identify a mediator who is mutually acceptable and available.

The practical reason for identifying a specific mediator in the contract in advance is so that the resolution process itself does not become another argument at a time when the parties are already in disagreement. Hence, it is highly advisable for the parties to discuss the mediation clause prior to signing the contract so should an unanticipated contract disagreement arise, there is no disagreement about how to resolve it.