Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Arlen Co and Brisa Co mediated their dispute and signed a written settlement agreement. Arlen later refuses to perform it. Which statement is correct?

Brisa can sue for breach of contract. Mediation is non-binding as a process, but when the parties sign a settlement agreement it becomes a contract between them. The mediator has no power to enforce it.

  1. AThe mediator can enforce the agreement as an arbitral award
  2. BNothing in the agreement can ever be enforced because mediation is non-binding
  3. CMediation outcomes cannot be recorded in writing
  4. DThe signed settlement is a contract, so Brisa can sue for breach of itCorrect

Explanation

Mediation itself imposes no decision, but once the parties sign a settlement they have made a contract, enforceable like any other by an action for breach. The mediator has no enforcement power. The non-binding nature relates to the process, not to a settlement the parties agree.

Did you get it right without looking?

One question tells you little. A timed set on Alternative dispute resolution mechanisms shows your real accuracy, how long you take and where you lose marks.

Practise Alternative dispute resolution mechanismsFree diagnostic mock

More Alternative dispute resolution mechanisms questions