Definition
This clause requires good-faith mediation before litigation—a neutral mediator helps parties discuss settlement. It's usually cheaper and faster than court.
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Mediation clauses require dispute resolution attempt before suing: 'Parties must mediate for 30 days before filing lawsuit.' Mediation involves neutral mediator facilitating settlement discussions (mediator doesn't judge, just helps parties communicate). Advantages: usually cheaper than litigation, faster resolution, preserves relationships (cooperative process), confidential (mediator notes aren't disclosed), flexible (parties control outcome). Disadvantages: takes time (must exhaust mediation before suing), mediator cost, might delay resolution. Mediation is effective for: neighbor disputes, partnership disputes, business contracts, family real estate disputes. Less effective for: clear legal violations, disputes with bad actors unwilling to negotiate. Mediati on clauses are increasingly common and usually viewed positively (force settlement discussion). Enforceability: courts generally enforce clauses requiring good-faith mediation attempt. Understanding mediation: if you sue before mediating, other party can sue to stop lawsuit until mediation occurs.
Pro Tip
Mediation clauses save time and money compared to litigation. Comply before suing.
Example
Dispute over property boundary: contract requires 30-day mediation before litigation. Mediator facilitates discussion; if settlement reached, both parties avoid court.