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Resolving Contract Disputes Using Mediation

Resolving Contract Disputes Using Mediation

Contracts are Everywhere

Daily transactions and small business activities require people to engage in contracts on a regular basis.  Whether it’s charging on a credit card, ordering goods over the internet or hiring someone to clean the carpets, there are expectations as to what is being requested and how it should be delivered.  Some of these expectations are spelled out in written contracts and others are enforceable by legal standards.

What Are Contract Disputes?

Contracts are binding agreements with clients, employees, partners, and vendors that define the responsibilities of both parties. Relying on contracts is crucial in performing everyday business operations. 

Types of Contract Disputes

  • Disagreement as to whether a screen repair was correctly executed.
  • Poor work done on an automobile repair
  • Failure to complete a job or deliver goods timely
  • Inability to pay a credit card bill or statement due
  • Partial payment for a construction remodel
  • Deficiency in pool repair
  • Water damage to a condo from another unit
  • Supply of incorrect materials for a new roof
  • Damage to property while performing services requested

When someone fails to meet expectations or follow the terms of the agreement, this is called a breach or default of the contract.

A breach of contract can occur when one person fails to pay the amount due or to deliver the goods or services on time. Sometimes there can be a disagreement as to the quality of the goods or services, or whether all the conditions were met.  A breach of contract can be either non-material or a material breach of contract.

A non-material breach of contract is a minor breach that occurs when non-compliance with the agreed terms is not critical enough. The contract’s integrity is not compromised. On the other hand, a material breach is a crucial and irreparable breach of the agreement.

Contract controversy

Options for Enforcement

When a breach of contract occurs, the most common way of enforcing the contract or recovering damages is by filing a lawsuit. Litigation can be expensive, time-consuming and emotionally draining.

In court, a party must that:

  1. the contract is a valid and binding agreement between the parties
  2. the other party failed to meet its contractual obligations, and
  3. such breach resulted in monetary damages for the plaintiff. 

Demonstrating breach of contract allegations in a court requires going through an exhausting process of disclosures, discovery, opening statements, witness examination, and closing arguments.   It is not uncommon to hire expert witnesses and take despositions.

If maintaining the business relationship between the disputing parties and keeping business secrets out of public sight is important, then mediation may be a better option.  As an alternative dispute resolution method, mediation proves to be a more advantageous process for dealing with business contract disputes. 

Resolving Contract Disputes Through Mediation

Mediation can be a much more effective and satisfying way to resolve a contract dispute.

Advantages of Mediation:

  • neutral and safe environment,
  • voluntary in that parties are not forced into an outcome,
  • Confidential for grievances
  • Saves time and is more efficient
  • cost-effective
  • allows parties to retain control of the resolution
  • skilled facilitator to guide discussion

One of the dominant features of mediation is its confidentiality. Keeping contract disputes out of the public record is crucial in business circles because it continues business operation and protects both parties’ reputations.

Furthermore, most costs related to the dispute litigation are absent in mediation. Various court filing expenses and extensive attorney fees are not part of the mediation process.

Parties make their own decisions.  Unlike litigation, where the jury acts as a referee of facts while the judge controls the procedure, there is no judge or a jury in contract dispute mediation. The mediator is a neutral third party who facilitates negotiations while allowing the parties to maintain control of the outcome.

The mediator holds both private sessions (caucuses) with each party separately and joint sessions in the presence of both parties.   Disputing parties are not required to be present with each other, if that is what they prefer.

The mediation allows the participants more control by allowing them to explore the reasons for the dispute and consider other options for resolution. The ultimate goal of mediation is to reach an outcome that addresses the needs of both parties and allows them to move forward.  Any agreement reached, will be with the consent of all parties.

Successful negotiations lead to a settlement between the contractual parties, which is signed by all parties. Such an agreement is enforceable in court as a binding contract.

As a Florida Supreme Court certified mediator with years of experience, Kim Torres adheres to the highest ethical and professional standards in mediating contract disputes.   She has mediated thousands of cases with individuals, small business owners and corporate participants.  Her skill is in working with people with patience, compassion and creativity while remaining practical.

If resolving a contract dispute in a highly-confidential and neutral manner is your top priority, please contact us today and schedule your appointment.  Kim@TorresMediation.com.