Before a person works with an attorney to resolve a contract dispute through litigation, he or she should consider using other methods to make sure all the possibilities of the case are covered. If the parties can work out their differences outside court, it can be much easier on both. The first approach is always to try to work out the dispute through simple discussion. Many disputes arise from misunderstandings. Too often those misunderstandings become emotional and the parties lock into positions. This is when other approaches might be warranted.
In some cases, government agencies exist to help. One of the first things a person can do during a contract dispute with a contractor is talk to a state or local agency about the dispute. If a contract is with a contractor licensed with a contractor agency, then that agency may be able to help anyone with a complaint go through a resolution program to eliminate contract disputes.
Another approach people can try is mediation. Mediation helps people understand and settle their differences. There are no winners or losers and the mediator does not declare a winner. Mediation can be done with a retired judge or other attorney or litigator. This person works as a third party, listening to both sides of the story. After listening, the mediator may help each party better understand how to come to a resolution. Anything a mediator says, however, is not binding in a court of law.
Binding arbitration is different than mediation because it is binding in the end. It works similarly to mediation, but at the end of the service, the arbitrator makes a decision that is legally binding. Once the decision is given, no party has the right to appeal, making this a very straightforward approach to resolve a dispute. Binding arbitration is similar to litigation but less formal and often faster.
As the dispute resolution progresses from the parties talking to each other through contacting a government agency and then mediation and arbitration, the complexity of the process increases. An experienced attorney can assist in dealing with all of these approaches.
Source: House Logic, "How to Resolve a General Contactor Dispute: Your Legal Options," Barbara Eisner Bayer, accessed Jan. 21, 2016