Construction Management Practice Exam 2025 - Free Construction Management Practice Questions and Study Guide

Mediation is a method of dispute resolution that is considered nonbinding because it involves a neutral third party facilitating a conversation between the disputing parties to help them reach a mutual agreement. The mediator does not have the authority to make a decision or impose a resolution; instead, they guide discussions to explore possible solutions.

Since the outcome relies on the parties agreeing to the terms, mediation allows for more flexibility and control over the resolution process. This is in contrast to litigation, where a judge or jury makes a legally binding decision, and arbitration, where an arbitrator renders a decision that both parties agree to abide by, making them binding processes. Negotiation typically refers to direct discussions between the parties to resolve their differences without third-party input, which can be binding or nonbinding depending on the context, but it is not a structured method of dispute resolution like mediation.