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arbitration

arbitration definition - legal

A method of alternative dispute resolution whereby a dispute, with the consent of all the parties, is submitted to a neutral person or group for a decision, usually including full evidentiary hearing and presentations by attorneys for the parties. Often, arbitration is the only form of proceeding permitted under the terms of contracts; see arbitration clause. See also conciliation, mediation, and summary proceeding.

arbitration clause

A clause in a contract requiring the parties to submit all disputes arising from the contract to an arbitrator or group of arbitrators rather than to proceed with litigation. Usually, a breach or repudiation of a contract will not nullify the clause.

binding arbitration

Arbitration proceeding that is final and binding by prior agreement of the parties, or by legal rule or statute; no right of appeal or further proceedings. compulsory arbitration. Arbitration required by law rather than by the mutual agreement of the parties to a dispute.

nonbinding arbitration

Arbitration in which the parties to the dispute are not required to abide by the arbitrator or arbitratorsÂ’ decision and may ignore the decision and submit the dispute to litigation.