Legal definition of arbitration
Dispute Resolution Legal Terminology


Arbitration is a method of dispute resolution out of the court. The parties to a conflict agree to be bound by a decision made by an arbiter, an independent third party or a panel of arbiters.

The arbitration may be voluntary as well as statutory, or mandatory by the terms of the contract.

The decision of an arbitrator is as binding on the parties to the arbitration as a court judgment, and it can be enforced by the courts, if necessary.

Arbitration differs from mediation in that once you enter the arbitration process, you are bound by the arbitrator's decision. Mediation is a negotiation process, in which the mediator helps the parties negotiate a mutually acceptable solution.

Because arbitration is a private method of settling disputes, parties can tailor the arbitration proceeding in almost any manner they choose. For example, parties involved in arbitration can agree to limit the number of witnesses each side will present, set parameters on the amount and type of evidence that will be presented, and pre-determine what issues the arbitrator's award should cover.

Source: United States Arbitration & Mediation
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