"Negotiation is a bargaining relationship between parties who have a perceived or actual conflict of interest. *** Mediation is an extension or elaboration of the negotiation process that involves the intervention of an acceptable third party who has limited (or no) authoritative decision-making power.  This person assists the principal parties to voluntarily reach a mutually acceptable settlement of the issues in dispute.  As with negotiation, mediation leaves the decision-making power primarily in the hands of the people in conflict."  Moore, The Mediation Process (2003).
The presence of the non-party neutral and his or her "intervention" necessitates that the relationship be governed by contract.  What follows is taken from the Mediation Agreement I presently employ.

Mediation Agreement
1.Mediation is confidential.  Mediation sessions are confidential in that (1) no participant or other person attending the mediation may later testify or seek to compel the testimony of another in any proceeding as to what statements were made or omitted by any person in connection with the mediation session or what happened during the mediation; (2) no statement or materials made or omitted in the mediation shall be subject to discovery in any proceeding; and (3) the disclosure by a participant or by a mediator of any information in the mediation shall not alter its confidential or privileged character.  The parties will not subpoena or otherwise seek to compel the mediator to testify or produce records, notes, or work product in any proceedings as to what was said or produced in the mediation session or in any communication made as part of or arranging or concluding the mediation.  Unless otherwise agreed, the results of the mediation are not confidential.
Upon termination of the mediation for any reason (see item 6 below), including settlement, any disclosures made thereafter cease to be confidential.
2. Mediation is voluntary.  It may be terminated at any time by any party or the mediator (subject to court order if there is any.)
3. The mediator is an independent contractor employed to facilitate negotiations.
 He does not serve to give legal counsel for any party, but is an impartial neutral person who represents no party.  The parties will consult their own attorney for legal counsel.  The mediator does not decide the outcome of the mediation as would a judge or arbitrator.
4. Consulting with attorneys.  The parties are encouraged to consult freely with their attorneys and may do so in private.  While the mediator may discuss legal concepts and options with the parties, this is to serve as a facilitator to the discussions and is not meant as a substitute for the legal advice of counsel for the parties.  The mediator has no duty to assert or protect any legal right or obligation of a party or participant.
5. Caucuses are sessions held by the mediator with one party separately and privately.   They are meant to improve the mediator's understanding of a party's position where the information sought and given may be too sensitive to disclose at the tme.  The information gained through the caucus may be disclosed by the mediator to any other party unless the disclosing party instructs the mediator not to disclose the information.
6. Termination of the mediation may occur at any time for any reason at the option of any party by declaring it to the mediator.  Likewise, the mediator may at his or her discretion terminate the mediation at any time by declaring it to all parties jointly.  Upon a termination of the mediation for any reason, including settlement, any disclosures made thereafter cease to be confidential (see also item 1 above.)