A mediator does not usually become involved until there is a dispute, often with the threat of litigation on the horizon.

However, as businesses face the fact that some contracts simply cannot be performed in a difficult economic environment, mediation is being used more and more to help parties renegotiate contracts.

Renegotiating a contract

With rapid changes in the business world, contracts cannot always withstand events. This has been particularly obvious during the pandemic, with parties simply unable to perform their obligations.

Where those involved still have the will to undertake part of the contract and there will ultimately be a benefit to everyone, renegotiating a contract means the parties can have certainty and a way forward.

In some instances, contracts will be part of large transactions involving numerous parties. Saving a contract might be the difference between enterprises failing or succeeding. In the current climate, being flexible and looking at the big picture will benefit everyone.

How can mediation help?

Parties may sometimes be reluctant to enter into negotiations to redraft a contract. A mediator can usually find out the root cause for any hesitation and work to reassure those involved.

Employing a mediator at an early stage is also hugely advantageous in preventing the parties’ relationship from breaking down. An experienced negotiator will be able to focus each side on the outcome they would like and prevent disputes arising over smaller issues.

Without a mediator, parties can sometimes misunderstand each other or focus on the wrong points, ramping up minor niggles into full-blown disagreements. Over time, views become entrenched and it is much harder to reach consensus.

Bringing a mediator into the process at the earliest opportunity offers an excellent chance of reaching a successful and ultimately profitable renegotiation of a contract. A specialist commercial mediator is not only an expert at helping parties reach a mutually acceptable agreement but will understand the commercial situation of both sides as well as their place in the market. They will use this in-depth understanding to help the parties in their business endeavors and may be able to come up with innovative solutions that might not otherwise have been considered.

How to commence a contract renegotiation

It is important to approach the problem with an open mind and some flexibility. If one party genuinely cannot fulfil their obligations, then pushing them to agree to something that is beyond their reach will only result in more difficulties.

Renegotiation will involve some level of compromise and those who can accept that are best placed to salvage something from a difficult situation.

Time is often a big factor in renegotiation. Addressing the problem as soon as it becomes apparent and having an early session with a mediator can resolve the issue, put the parties on a new course and let everyone focus on moving on with their business.

Where difficulties are allowed to fester and communication is sporadic and reluctant, it is possible to spend months achieving very little except a worsening of relations and many hours spent in correspondence.

Contact us

At Lux Mediation, we offer a range of different Dispute Resolution Services, designed to deal with all types and stages of disputes. We are experienced in and understand the subtleties of online mediation. Our mediators have extensive credentials and experience in areas including maritime, international, EU and general commercial and civil law.

We can step in early to advise you in respect of a contract renegotiation. We work internationally and have an in-depth understanding of cultural differences, often of great importance in a successful mediation.

Our mediators are experts in both mediation and commercial enterprise and we have an excellent track record of success in helping businesses put difficulties behind them so that they can focus on their goals.

If you would like to explore further whether we can help you to renegotiate a contract or you have any questions about the process, please call Lux-Mediation on +44 (0)7876 232305 or email mediation@lux-mediation.com.

With many years international and domestic experience in mediation, arbitration and litigation Lux Mediation can give guidance on any dispute with a view to a swift and effective resolution.