If a dispute arise between two parties, and a third party volunteers to mediate, are any agreements made to the mediator binding on the two parties?

Question

For example Bob hires Fred to do a job. Bob does not believe Fred fulfilled his duty and refuses to pay. If Fred asks a friend of Bob to talk to Bob about it, and Fred agrees (to the mutual friend) to pay 50% the initial wage, is this agreement binding? Would it make a difference if Fred is CC'd on the email where Bob agrees to pay Fred 50%, and Fred replies accepting this as a settlement?

Hypothetically if Bob decided to still not pay 50% could Fred use this as evidence to sue?

Aside: I had asked a lot of questions regarding getting money back from a landlord. I would like to sincerely thank everyone who provided information. It was difficult, but I prevailed in court without a lawyer.

Answer 1

Mediation is non-binding

Mediation and conciliation are non-binding methods of dispute resolution. If properly conducted, a mediator does not make any suggestions as to how the parties might resolve a dispute; they simply maintain a space where such a resolution might occur.

If the parties reach an agreement, that agreement might be a legally binding contract. See What is a contract and what is required for them to be valid?

If it is, then it could be enforced by a court. If it isn't then compliance is voluntary.

What you describe is not mediation

However, the agreement facilitated by Bob & Fred's mutual friend either is or is not a contract and the same circumstances follow.

Answer 2

is this agreement binding?

It depends on the terms of the agreement.

The mediator/friend is not getting anything in return, which means that there is no exchange of considerations and consequently an agreement between Bob and the mediator is not a contract. For the agreement to be binding, it ought to reflect who the parties are (i.e., Fred and Bob) and its relation to the underlying dispute between them, lest Bob later allege that his promise was altruistic and unenforceable. The effect of Fred's acceptance reply would be similar to him formally being a party.

But even if Fred neither replies nor is a party to the agreement between Bob and the mediator, Bob's agreement with the mediator might amount to Bob's acknowledgment (i.e., evidence) that he owes Fred some money. The wording needed for this approach is trickier, less straight-forward than having Fred as party to the agreement.

if Bob decided to still not pay 50% could Fred use this as evidence to sue?

Yes, provided that the agreement meets at least one of the aforementioned conditions.

It was difficult, but I prevailed in court without a lawyer.

Kudos to you. That exposure will make it harder for others to get away with violating your rights.

Answer 3

If Fred asks a friend of Bob to talk to Bob about it, and Fred agrees (to the mutual friend) to pay 50% the initial wage, is this agreement binding?

Probably not. The mutual friend is in a position to see that there is a basis for a settlement that both parties would agree upon, but there needs to be a communication between the parties themselves (or through the mutual friend acting as a messenger back and forth) for there to be a binding agreement.

The exact language of the communications and role of the mutual friend would matter in determining what happened from a legal perspective.

Would it make a difference if Fred is CC'd on the email where Bob agrees to pay Fred 50%, and Fred replies accepting this as a settlement?

Yes. Then you have offer and acceptance, and the third-party is just a bystander. A slight variation of this would be common in a formal mediation.

Hypothetically if Bob decided to still not pay 50% could Fred use this as evidence to sue?

It depends on the context which this question doesn't make clear.

Settlement negotiations are not admissible as evidence to prove liability on the merits.

But the settlement negotiations can be admissible to prove a claim that there was a settlement agreement involving an offer and an acceptance that formed a settlement agreement contract.

Mediators themselves and some mediation communications are privileged from being used as evidence in court for some purposes, but the written communications showing an offer and acceptance of a settlement agreement could probably be admitted (and, of course, a mere mutual friend doesn't count as a full fledged mediator for the purposes of this legal privilege).