Mediation Contract Clause: A Vital Addition to Any Contract
In today`s fast-paced business world, disputes are bound to arise no matter how careful and meticulous parties to a contract are. While litigation may be the go-to solution, it`s neither the most efficient nor the most cost-effective way of resolving disputes. That`s where mediation comes in. Mediation is an alternative dispute resolution mechanism that involves a neutral third party who assists the parties in reaching a mutually acceptable agreement. Mediation has become increasingly popular in recent times and for a good reason. It`s faster, cheaper, and less adversarial than litigation. With mediation, disputes can be resolved within a relatively short period, averting the time, expense, and negative publicity that often come with lawsuits.
If you`re considering using mediation as a dispute resolution mechanism, it`s crucial to ensure that your contract includes a mediation clause. A mediation clause is a provision in a contract that requires the parties to submit their dispute to mediation before pursuing any other dispute resolution mechanism. The mediation clause should specify the process, procedures, and requirements of the mediation process, such as the appointment of the mediator, the venue, the time frame for the mediation, and the costs of the mediation.
One of the primary benefits of a mediation clause is that it ensures that the parties attempt to resolve their dispute before resorting to more formal and expensive dispute resolution mechanisms. This can save parties valuable time, money, and resources. Additionally, mediation can help to preserve business relationships, which can be vital in situations where the parties will continue to work together in the future.
Another benefit of a mediation clause is that it affords parties greater control over the outcome of the dispute resolution process. In a litigation process, a judge or jury will ultimately decide the outcome. However, in a mediation process, parties can control the outcome by negotiating and reaching a mutually acceptable agreement. This can be particularly advantageous in situations where the parties` relationship is ongoing, and they wish to maintain control over the outcome.
In conclusion, mediation is a valuable alternative dispute resolution mechanism that can save parties time, money, and resources. To ensure that mediation is a viable option in case of a dispute, you should consider including a mediation clause in your contract. A well-drafted mediation clause can help to ensure that parties attempt to resolve their dispute before resorting to more formal and expensive dispute resolution mechanisms, affords parties greater control over the outcome of the dispute resolution process, and can help to preserve business relationships.
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