MEDIATION CLAUSE

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 United States Arbitration & Mediation Midwest, Inc.

SAMPLE 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 Midwest, Inc. The parties agree to share equally in the costs of the mediation. The mediation shall be administered by the offices of United States Arbitration & Mediation Midwest, Inc., 720 Olive Street, Suite 2300, St. Louis, Mo 63101 314-231-4642.

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:

  1. 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.

  2. 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.

Copyright 2005. United States Arbitration & Mediation Inc.

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