Conflict takes the Joy out of Business.
It may be challenging to know how to negotiate resolution to a business dispute without compromising a valued relationship; other times no relationship exists and resolution of the dispute is the only priority. In either situation, speedy resolution is possible through mediation or arbitration. Mediation and arbitration provisions are very common in business and commercial contracts.
Mediation is a confidential negotiation processes that allow participants to address business disputes in a less formal way. Mediation can be chosen before or after a dispute arises. A contract may call for mediation in one of its provisions, or parties may elect to participate in mediation after a dispute arises. Mediation participants retain a greater degree of control than parties to a law suit, because the participants themselves choose the outcome through a guided negotiation and resolution-writing process. When agreement is reached in mediation, a Memorandum of Understanding, also referred to as MOU, is drafted and signed by the participants that may later be filed in court for enforceability.
Mediation resolves conflicts while preserving relationships. Mediation is widely accepted in Colorado as a preferred way to address disputes and to avoid litigation. Mediation yields agreement in the majority of cases and is often a mandatory step prior to filing a dispute through arbitration or litigation.
Arbitration is generally elected through a dispute resolution contractual provision that is written into a contract before a dispute arises. When an arbitration provision exists, the courts tend to honor these provisions and directs the parties back to arbitration when a party files their dispute with the court.
Often the costs of arbitration can be greater than the original claim amount, making resolution cost-prohibitive. It is for this reason that Colorado Mediators & Arbitrators has designed a three-tiered hearing process that takes into consideration the amount of the claim.
Read more: Rule A-5. Size and Classification of Claim