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What happens with mediation in a lawsuit

On Behalf of | Aug 26, 2022 | Business Litigation

Mediation is an informal version of a court hearing. This form of litigation helps parties settle matters for less time and money.

Business litigation is a complex matter best handled by licensed legal professionals with specific expertise.

Disputes arise from misunderstandings between businesses. Mediation is a business litigation method to resolve disagreements while protecting the business relationship.

Benefits of mediation

Mediation is used in business litigation to help willing parties come together. Contracts use broad language that offers varied interpretations. A simple agreement example is when one party pays another for a promised product or service.

Suppose a business accepts payment to build a structure but doesn’t have the required building permit, and the city denies the license to build. The party that paid will expect a full refund, while the builder might have language that says no refund under any circumstances. Business litigation confronts these types of issues and disputes by using the law and by working with the parties to a successful end. Damages can be awarded through mediation similar to a formal court decision.

Suppose the injured party signed the agreement thinking “circumstances” meant natural disasters and that they had every right to believe the builder had proper licensing. The dispute could result in a business litigation claim.

A mediator can help resolve the dispute by offering a solution that benefits both parties. Since the injured party did agree to the vague contract terms, they can decide to accept a portion of their money back, and the unlicensed builder can avoid a costly formal lawsuit.

Enforceable Mediation

In business litigation, some claims are better served in a formal courtroom rather than through mediation. Arbitration agreements are final and, therefore, irrevocable. Giving fervent consideration is best before signing any contractual agreements.