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A business contract, lease or other written contract may contain a mediation
clause. By using such a clause, the parties to the contract agree to mediate
any future disputes. As with any clause, all parties must agree to it, and
the following mediation clause does not have to be used "as is"
in order to use the services of USA&M or its affiliated offices.
SAMPLE USA&M MEDIATION CLAUSE:
In the event a dispute shall arise between the parties to this [contract,
lease, etc.], the parties agree to participate in at least four hours of
mediation in accordance with the mediation procedures of United States Arbitration
& Mediation. The parties agree to share equally in the costs of the
mediation. The mediation shall be administered by [one of the following
choices: (1) designate a specific USA&M-office, including address and
phone number; (2) provide a method of identifying the correct USA&M
office such as "where manufacturing plant is located"; or (3)
insert "a local USA&M office to be designated by USA&M National
Headquarters"].
Mediation involves each side of a dispute sitting down with an impartial
person, the mediator, to attempt to reach a voluntary settlement. Mediation
involves no formal court procedures or rules of evidence, and the mediator
does not have the power to render a binding decision or force an agreement
on the parties. |
Other Considerations:
- Enforceability--Generally, mediation clauses are enforceable.
However, mediation is essentially a consensual process, and a settlement
is unlikely if one party is forced to participate. The mediation clause
recognizes that both parties have considered, and are open to, the mediation
process. When disputes arise among parties who have previously recognized
the value of mediation, there is usually no need to force one party to
participate.
- Med-Arb Clause--To provide finality to a dispute resolution
clause, many parties include an arbitration provision, in the event their
dispute is not settled during mediation. Essentially, an arbitration clause
follows the mediation clause, and requires the parties to submit all disputes
not settled in mediation to a final and binding arbitration. the mediator
should never serve as an arbitrator in a subsequent arbitration, since
he or she will have been exposed to confidential communications during
the mediation process.
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