How can you include a mediation clause in a vendor contract?

1 Why include a mediation clause?

A mediation clause is a provision in a contract that requires the parties to attempt mediation before pursuing litigation or arbitration in case of a dispute. By including a mediation clause in a vendor contract, you can benefit from the advantages of mediation and avoid the drawbacks of litigation or arbitration, such as high costs, lengthy procedures, adversarial outcomes, and loss of control. A mediation clause can also show your goodwill and commitment to resolving disputes amicably and cooperatively.

3 How to negotiate a mediation clause?

Negotiating a mediation clause is an important part of the contract negotiation process, requiring skill, strategy, and flexibility. To negotiate a mediation clause effectively, you should understand your interests and goals, as well as those of the other party. Explain why including a mediation clause is beneficial for both sides and how it aligns with their interests and goals. Seek mutual gain by looking for ways to create value and satisfy the needs of both parties. Research and prepare your arguments and evidence for the mediation clause. Additionally, be prepared to adapt to changing circumstances during the negotiation.

4 How to enforce a mediation clause?

A mediation clause is a contractual obligation that binds the parties to follow its terms. Unlike arbitration or litigation, however, mediation does not result in a legally binding decision by a third party, unless the parties reach a settlement agreement and make it enforceable. Consequently, enforcing a mediation clause relies heavily on the goodwill and cooperation of the parties. If one party breaches the mediation clause and refuses to participate in or complete the mediation process, the other party may have some options to consider. These include seeking a court order to compel the breaching party to comply with the mediation clause, if the contract is governed by a jurisdiction that recognizes and enforces mediation clauses; requesting the mediator to issue a certificate or report that confirms the breach of the mediation clause, which can be used as evidence in a subsequent litigation or arbitration proceeding; and claiming damages or other remedies for the breach of the mediation clause, depending on the wording of the clause and the applicable law.