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Most disputes arise because of a lack of preparation about eventualities. Careful contract drafting contemplates the consequences due to one or both parties failure to perform or, if some third-party event or circumstance arises which affects performance. In sum, the well written contract will often help the parties resolve potential disputes because the contract provides a roadmap of solutions to various potential future occurrences.

Sometimes, despite a contract drafter’s best efforts, facts arise that do not lend themselves to an easy resolution between or among the parties. A dispute arises. Personalities get involved. Then it’s “off to the races” as it were. Of course, not every dispute arises from a contract. Accidents occur. Statutes are violated. Regardless of the origin of the dispute, something needs to be done to overcome the impasse. The traditional avenues to resolve a dispute are as follows.

First, of course, there is negotiation. The parties, and/or their representatives, marshal the facts and law as they best see it and exchange proposals which will address the circumstances creating the dispute. Give and take occurs. With some effort and luck, and people on both sides placing their personalities aside, a resolution can be crafted. Short of the conflict occurring in the first place, this is the ideal outcome.

Very often, negotiations do not prove successful. The parties assume a “zero-sum game” philosophy where one side “wins” and one side “loses” and there is nothing but acrimony on either side, and the sides take “positions” which seem insurmountable. Litigation then ensues. And this is the second means by which disputes are resolved. Namely, using the court system. Litigation is very slow, very monotonous, and very expensive, both financially and emotionally. It is the least preferable method of resolving disputes. It has the further quality of being subject to appeal should the case go through a trial. Litigation should be avoided whenever possible.

The third means of resolving disputes is through mediation. It can occur either before or after litigation has begun. Mediation is a form of negotiation in the sense that it is voluntary and non-binding. (Litigation holds neither of these qualities.) Mediation is essentially “facilitated” negotiation by a neutral third party – a mediator – who helps the parties put aside their personalities and positioning and instead works with the parties to create a resolution that everyone can live with. A mediator focuses on the underlying issues at play.  Ideally, the mediator can facilitate what is commonly known as a “win-win” solution where both sides actually are better off after the mediation than before. It does happen sometimes. When the parties cannot negotiate their own dispute’s resolution, mediation is the most preferable alternative.

Finally, the fourth means of dispute resolution is arbitration. Arbitration is essentially the process by which a private judge for hire – an arbitrator – considers the parties evidence and arguments and renders an “arbitration award” that is legally binding on the parties. The award can be converted into a court judgment for purposes of enforcement if the losing party fails to abide by the arbitration award. Arbitration is more formal than mediation but less formal than litigation. An arbitrator will not strictly follow the rules of evidence a judge must follow and has some latitude in doing what is both fair and just under the law. The main benefit of arbitration is that it is fast and final. Rarely, if ever, is an arbitration award challengeable in a court of law and there are no appeals.