Mediation is a method of conflict resolution, which uses a negotiation process between two or more parties to arrive at a mutually agreed-to, legally enforceable contract. The contract is not imposed upon them by the mediator.
Mediation derives from a win-win model of conflict resolution.
The mediator's job is to help the parties resolve their conflict and facilitate a communication of ideas between them. The end result is a legally enforceable contract. In this sense mediation is more similar to settlement discussions than to arbitration or a court proceeding. In contrast, arbitration is much more akin to trial than it is to mediation. Rules of evidence and civil procedure apply in arbitration but not in mediation.