It is almost never advantageous for a business to go to court if it is possible not to do so. Resorting to litigation can ruin an otherwise fruitful relationship and be a very expensive endeavor.
Thus, it is almost always better to try and settle out of court. The two most popular ways to do this are mediation and arbitration. As per FindLaw, mediation is usually a non-binding situation whereas arbitration is binding.
What is mediation?
Mediation is when the parties sit down with a mediator and go through a guided discussion about the dispute. The idea is that in this environment, the parties can come to a resolution or remedy through the discussion.
Mediation can be very effective, because often an injured party simply wishes to “say their piece.” Once they do this, settling can be very simple. However, keep in mind mediation is non-binding in most cases; this means if one party is not happy with the outcome of mediation you may end up in court anyway.
What is arbitration?
Arbitration looks more like a traditional courtroom, only arbitration replaces the judge figure with a single arbitrator or a panel of arbitrators. With arbitration, the parties can pick who the arbitrators are. In some cases, this is necessary as a common judge may not have the technical or specialized knowledge to fully grasp the nuance of some disputes.
Arbitration is typically binding. This means that if one party is not happy with the remedy suggested by the arbitrator, he or she will have no recourse in court. It can be more difficult to overturn the decision of arbitrators as compared to overturning a court decision in some cases.