  This paper presents a model to describe contractual dispute resolution by
mediation in situations where a defaulting supplier is near insolvent. While
each party has internal constraints, and if alternate performances are
available, such as more costly alternative goods, the proposed approach allows
the mediator to find an optimal solution. The notion of optimality is presented
as adherence to the initial contract, therefore optimising a value function for
the non defaulting party. The proposed model includes describing the evolution
over time of each party's perceived constraints using a phasor like approach
with a modulation to the core constraints phasing out of the real part and
phasing in the imaginary part of complex numbers. The offers related to
alternative performances by the defaulting party are modelled by a Gompertz
function, being an exponential learning curve of the supplier in regards to the
reaction to its offers, limited by another exponential function when
approaching its internal constraints. Furthermore, the model takes into account
the discount associated to the delay in the delivery time of the alternative
performances.
