People choose mediation because it is a voluntary (in most cases), nonbinding process that does not affect their ability to pursue further legal action. These are important benefits of mediation, but they can also pose a concern. What if the parties do come to an agreement as a result of the mediation and one party does not hold up their end of the bargain? Does a mediation agreement amount to a “gentlemen’s agreement” or is it a legal contract?
It depends. I know we all hate that answer; what it lacks in clarity it makes up for in ambiguity. Here are some possibilities, though:
- The simplest situation would be for both parties to create a new agreement with clearer deliverables, and then commit it to writing. This might amount to a continuation of the first mediation.
- It evolves into a breach of contract case because the agreement reached in mediation is a contract. As a practical matter for such a lawsuit to have any teeth, the agreement reached at mediation needs to have been in writing in order for a Court to determine what the agreement was about.
- They could walk away and reevaluate their options.
The avenue the parties decide to pursue depends, too, on the nature of the mediation agreement. It is not unusual that mediation does not result in a written agreement. Because in most cases I’m dealing with workplace conflict resolution, the parties have to have some sort of relationship after mediation. The goal is not a contract, per se, but a new pattern of interaction between these people. These agreements can be much more difficult to enforce in court.
I had one case, for example, that involved two parties with very different communication styles. One was very aggressive, while the other was passive and tended to let problems build up. They agreed to allow each other to use their preferred communication style, as well as attempting to accommodate the other person’s approach. In other words, they would try to meet in the middle. When they needed to have a quiet, gentle discussion, one party would tap the other’s shoulder and say, “Think we can go for a walk around the block at lunch?” This would be a signal for the need to have a private and gentle discussion. On the other side, the passive party agreed to try to deal with problems more immediately and using firmer tones.
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How would you enforce that agreement in court? We wrote it down, but rather than a contract, it was intended as an aide-mémoire. “Remember you’re supposed to talk to me when you have a problem?” or, “Remember I’m supposed to use the signal to ask you for time to talk in private?” This would not likely become a breach of contract case. How would we determine if there was a breach? How would we measure damages? In this case, the parties could go back to mediation, come up with a new agreement to address what was not working, or recommit to the original agreement. Since they do have to continue the relationship, it is in both of their interests to try again.
The range of agreements that can be reached in mediation is really unlimited. In some cases, there is a clear-cut contract case that is enforceable in court. This doesn’t mean the parties have to go this route, but they certainly could pursue that option. Say that there is a dispute between two companies about a contract. They may have to have a relationship after mediation, but they ought to commit their agreement to writing. They should lay out exactly what amount of money will change hands, what work is to be performed, what the deadline is, etc.
If one party did not abide by the agreement, then it would be a breach of contract case, and the other party could take them to court, but the contract would not be the original one under dispute it would be the agreement they made at the mediation. Or, again, they could come back to mediation and try again. There are any number of possible avenues. When there is a lot at stake, such as contractual issues between companies, the mediation agreement should be written, and it should be enforceable in court so you have that remedy as an option if things go off the rails.
Hopefully we’ve cleared up “it depends” a little! Mediation is effective because parties have more ownership of the resolution. Usually this means both parties are more likely to comply, but if not, there are other options to pursue. A well-drafted mediation agreement should also be easier to understand than some boilerplate agreement that is practically undecipherable without a lawyer’s help.