Oregon Construction Contractors (CCB) Practice Test

What is true about mediation in disputes?

1. Mediation agreements are always binding

2. Mediation is not binding

3. Mediation must be documented in writing

4. Mediation costs are typically covered by the state

The correct answer is: Mediation is not binding

Mediation is a process aimed at helping parties in a dispute reach a mutually agreeable resolution with the assistance of a neutral third party, the mediator. The key aspect of mediation is that it is not a binding process unless both parties agree to the terms decided upon during mediation. In many cases, mediators help facilitate discussions and negotiations, but they do not have the authority to impose a decision on the parties involved. This flexibility allows the parties to maintain control over the outcome and reach a resolution that they both find acceptable. If an agreement is reached, it may be documented and turned into a binding contract; however, the mediation process itself, prior to any such agreement, is fundamentally voluntary and non-binding. This distinguishes mediation from other forms of dispute resolution, such as arbitration, where the arbitrator's decision is typically binding on both parties. Therefore, the understanding that mediation is not binding underscores the essential nature of this process as one focused on collaboration and voluntary agreement rather than a legal imposition.