Contract Glossary

Mediation

Definition

Mediation is a structured negotiation with a referee. A neutral mediator helps both sides find a compromise, but unlike an arbitrator, they can't force a decision. You walk away if you don't like the outcome.

In Practice

You and a business partner disagree over a $75,000 profit-sharing dispute. Before escalating to arbitration ($10,000+ in fees), you try mediation. A mediator charges $3,000 for a full-day session, meets with both sides, identifies common ground, and helps you reach a 60/40 split you can both live with. Total time: 2 weeks. Compare that to 6-12 months of arbitration. About 70-80% of mediated disputes settle.