What types of contract disputes suit mediation?
- Payment defaults and invoicing disputes
- Breach of contract claims (goods not delivered, services not performed)
- Disputes about the scope or quality of work performed
- Construction and building contract disputes
- Supply chain and distribution agreement disputes
- IT and software contract disputes
- Franchise agreement disputes
- Lease and commercial property disputes
Is mediation required before I can sue?
Many commercial contracts include a dispute resolution clause requiring the parties to attempt mediation (or at least good-faith negotiation) before commencing court proceedings. Failing to comply with such a clause before filing can result in a stay of proceedings and adverse cost orders. Check your contract before filing any claim.
How does a settlement agreement work?
If the parties reach agreement at mediation, the key terms are recorded in a heads of agreement or deed of settlement, signed by both parties before the session ends. This document is a binding contract and can be enforced in the same way as any other commercial agreement. It is not a court order — it does not require filing — but it can be enforced if breached.
What mediation can achieve that a court cannot
A court can only order money or a specific legal remedy. Mediation can produce any outcome the parties agree — including a revised payment schedule, a variation to the contract's ongoing terms, a trade of goods or services in lieu of payment, a mutual release, or a reference for an independent expert to determine a disputed technical question. This flexibility is one of mediation's key advantages for commercial disputes.
Worked example
A builder invoices $280,000 for completed works. The client claims defects and refuses to pay. If litigated in the District Court, costs could exceed $60,000 each over 18 months. At mediation: both parties agree an independent building inspector assesses the defects; the builder agrees to rectify confirmed defects; the client pays $240,000 on a staged schedule. Total mediation cost: under $10,000 each. Matter resolved in one day.
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