What is the primary role of mediation in contract disputes?

The primary role of mediation in contract disputes is to facilitate resolution through a neutral third party. Mediation is a voluntary process where an impartial mediator helps the conflicting parties communicate and negotiate to reach a mutually acceptable agreement. Unlike litigation, which is adversarial and often leads to a decision imposed by a judge or jury, mediation focuses on collaboration and finding common ground, allowing both parties to express their needs and interests.

The presence of a neutral third party is crucial because they guide the process, help clarify issues, and encourage constructive dialogue. This mediation approach aims to reach a win-win solution, preserving relationships and reducing the time and costs associated with prolonged disputes.

In contrast, mediation does not escalate disputes to litigation; rather, it seeks to prevent that escalation. Mediation does not provide legal representation for either party but rather serves as a facilitator. It also does not enforce settlement agreements legally; if a resolution is reached, it often requires drafting a formal contract to be enforceable.