What is "arbitration"?

Arbitration is indeed a method of resolving disputes outside of the traditional court system. This process involves an impartial third party, known as an arbitrator, who listens to the arguments and evidence presented by both sides. After reviewing the case, the arbitrator renders a decision that is binding on the parties, meaning that they must comply with the outcome. This is distinct from other forms of dispute resolution, such as mediation, where the mediator facilitates negotiation but does not impose a binding decision.

The binding nature of arbitration makes it a popular choice for many businesses and individuals seeking a quicker, more efficient resolution to their disputes without the need for a lengthy court trial. Unlike court trials, arbitration can often be more private and less formal, which can appeal to those looking for privacy in their disputes.

Understanding arbitration is essential, especially in contractual agreements where parties may agree to resolve any disputes through this method instead of conventional litigation.