What is a Contract?
Performing business operations or dealing with people in everyday life involves entering into agreements. We are often unaware that most transactions, from buying groceries to merging businesses, are operated through contracts.
Contracts are binding agreements between two sides, agreeing to perform specific actions or refrain from doing something. Contracts involve defining rights, duties and responsibilities between individuals, associates, and companies. Without contracts, life in modern societies would be unthinkable.
Although contractual rights and responsibilities are usually clearly defined, sometimes one of the parties acts opposite to the agreed-upon terms. Failing to fulfill a contractual obligation or taking actions despite explicit contractual prohibition constitutes a breach of contract.
In business relationships, breach of contract occurs in the case of delivering goods of inferior quality or goods that do not fit the purpose known to the other party at the time of entering the contract. Also, failing to deliver goods or pay the price on time is a clear violation of contract terms. Depending on the gravity of the consequences, there are two main types of contract breaches: non-material and material breaches. If acting contrary to the contract does not compromise its integrity, such a minor breach might be non-material. Conversely, material breach of contract is irreparable and gives the compliant party the right to seek performance and damages from the other side.
Resolving contract disputes involves proving that the contract is a valid and binding agreement. A complying party must also show that the opposite party failed to meet its obligation resulting in performance and monetary damages from the breaching party.
The traditional way of recovering damages due to a breach of contract is by filing a lawsuit and initiating court litigation. But proving breach of contract claims in litigation can be a challenging task. Besides, a complex structure of litigation that includes depositions of parties and witnesses, production of documents, evidentiary hearings and final trial makes it a timely and costly procedure.
In everyday life, especially in business relationships, people prefer resolving contract disputes as quickly as possible in a non-adversarial atmosphere, without undue publicity, at reduced costs. As an alternative dispute resolution method, Mediation emerges as a perfect tool for getting just compensation while continuing business cooperation in most cases.
The mediator is a neutral third person, often a retired judge or another professional with profound knowledge and understanding of contractual relationships. The parties choose the mediator voluntarily by signing the agreement to mediate. That is the opposite of a court process where an assigned judge conducts the procedure and issues a binding decision. Unlike a judge, the mediator cannot decide the dispute by issuing a decision. A Mediator’s role includes facilitating communication and negotiations between the parties, thereby helping the parties settle.
Furthermore, Mediation offers complete confidentiality. Parties are assured that nothing revealed during negotiations will leave the session room. Accepting the confidentiality clause, the parties agree to keep all details private. Even if the Mediation is unsuccessful, information acquired through Mediation is not allowed in future litigation.
The Mediation process typically consists of a Mediator’s introduction, attorneys’ opening statements in a joint session, and attorneys and parties in separate, private sessions with the Mediator. After a brief introduction, the mediator presents his or her qualifications and explains the procedure to the parties. In private sessions, parties talk with the mediator in separate rooms. The mediator goes back and forth between the private rooms, assisting parties to understand the strengths and weaknesses of their case; discussing their settlement options; and aiding in resolution of the controversy. During Mediation, the Mediator may meet separately with attorneys to help fashion a settlement. The mediator facilitates the negotiations between the parties with the goal of settling the dispute and avoiding additional litigation.
What differentiates the Mediation from adversarial methods is its reconciliatory aspect. The mediator seeks dispute resolution beyond monetary compensation in the appropriate case. As a result, the parties may continue their relationship after resolving the dispute.
If the Mediation is successful, the parties sign a binding agreement settling their dispute, enforceable in court.
Joseph P. Farina has a reputation as an ultimate mediator. His decades of experience as Chief Judge of the 11th Judicial Circuit, Florida Supreme Court Certified Mediator and designated Legal Luminary Best Mediator are what recommends him best.
Joe understands all the nuances of contract relationships and possesses a deep knowledge of contract disputes resolution. He possesses the patience, preparation and perseverance to achieve your best negotiated settlement in lieu of time consuming and costly litigation.