The opportunity for a dispute to arise in a business relationship happens far more frequently than you might guess. But I’m not here to convince you to get it in writing. You already know that.
What I’m wondering is whether you have a mediation clause in your standard contracts and agreements. In the past, most written contracts included attorney fee language: “In the event of a dispute, the prevailing party is entitled to attorney’s fees and costs.” But times have changed, and the win-lose philosophy of litigation is not the only choice. Mediation before litigation is an option that your clients will appreciate, as it is a cost-efficient and time-efficient alternative to resolving a dispute. The fact that this is built into your contract means it’s one less thing to worry about in the event a conflict should arise.
Let me take a moment to elaborate. During mediation, parties submit their dispute to a neutral mediator, who is trained to facilitate a resolution. Unlike in litigation or in arbitration, where a judge or arbitrator decides who should “win” the dispute, a mediator helps the parties work together to come to a balanced resolution. Another benefit is that mediation is private and confidential, and is an informal proceeding, even if lawyers are involved.
If you’d like to include a provision for mediation as a way of resolving a potential dispute, here’s an example of the language you can use in your standard contracts:
“The parties agree that any and all claims and disputes arising under or relating to this Agreement shall first attempt to be resolved through the process of mediation by an accredited mediation firm at a location mutually agreeable to the parties. If the mediation process does not result in a resolution of all claims and disputes, the parties further agree to settlement by binding arbitration in accordance with the laws of the State of Nevada. The fees and costs of mediation shall be split equally by all parties; however, the fees and costs of arbitration shall be borne fully by the non-prevailing party. An award of arbitration may be confirmed in a court of competent jurisdiction.”
There are significant rewards for making mediation a part of your company culture because it’s not only good business, it’s good customer service. Having a mediation clause in your customer contract will save you countless conversations about resolving an issue, and listening to another person’s opinion about who’s right and who’s wrong. Simply refer to the mediation clause in the agreement which you both signed, and then give me a call.
I’ll take it from there.