JD Next Practice Exam

In contract disputes, what is a common resolution approach that might be tried before litigation?

1. Mediation

2. Negotiation

3. Arbitration

4. None of the above

The correct answer is: Negotiation

In contract disputes, negotiation is indeed a common resolution approach that parties often attempt before resorting to litigation. This informal process allows the parties involved to directly communicate their concerns, discuss the issues at hand, and seek mutually agreeable solutions. The goal of negotiation is often to reach a settlement that satisfies both parties without the need for formal legal proceedings, thus saving time and costs associated with litigation. While mediation and arbitration are also viable alternatives to litigation, they involve third parties. Mediation includes a neutral facilitator to assist in reaching an agreement, while arbitration involves a neutral arbitrator who makes a binding decision after hearing both sides. In contrast, negotiation can be undertaken independently by the parties involved, emphasizing their ability to resolve their differences without external intervention. Given this context, negotiation stands out as the primary approach pursued prior to engaging in more formal alternative dispute resolution methods or litigation.