Arbitration
A method of resolving disputes outside of court where a neutral third party makes a binding decision.
What is Arbitration?
Arbitration is a method of resolving disputes outside of court where parties present their case to a neutral third-party arbitrator, whose decision is usually binding. It is often faster, private, and less formal than litigation.
Why It Matters?
It provides an enforceable resolution while reducing time, cost, and public exposure compared to traditional court proceedings.
Example
Two companies in a contract dispute agree to arbitration, and the arbitrator rules in favor of one party, which both must legally follow.
Related Terms
Mediation
Litigation