Unfortunately, a trip to the courthouse more often depletes resources than replenishes them. Businesses, however, can avoid expensive protracted litigation if they have the foresight to write mandatory mediation or arbitration clauses into their contracts. While both mediation and arbitration allow a quicker, more cost efficient means of resolving the dispute than litigation, they are almost complete opposites in the manner in which they work. A mediation is created by agreement and resolution of the dispute is reached only by an agreement between the parties. An arbitration is also created by agreement but, once created, it resolves the issues according to the arbitrator's decision and a set of arbitration rules and procedures.
Mediation is more informal and flexible.
All it takes is willing parties, several conference rooms and an independent third party serving as the mediator. There is no set time, place or manner beyond what the parties set by agreement. Usually a mediation starts with a brief opening session during which each side expresses its positions, followed by the parties going to different rooms while the mediator shuttles between them seeking a mutually acceptable solution. If a resolution is reached, it is only by agreement of the parties. No one can force a settlement and no one can force you to go beyond your agreement to attend the mediation.