What is Arbitration?
Updated January 24, 2026
A form of alternative dispute resolution where a neutral arbitrator hears evidence and arguments from both sides and makes a binding decision.
Understanding Arbitration
Unlike mediation, arbitration results in a decision imposed by the arbitrator. It can be binding (final, with limited appeal rights) or non-binding. Many contracts include mandatory arbitration clauses. Arbitration is typically faster than court but may limit discovery and appeal rights.
Examples
- 1Employment dispute resolved through binding arbitration
- 2Consumer contract requiring arbitration instead of court
- 3Arbitrator awarding damages after hearing testimony
Related Terms
Mediation
A form of alternative dispute resolution where a neutral third party (mediator) helps the parties negotiate a settlement without going to trial.
Statute of Limitations
A law that sets the maximum time after an event within which legal proceedings may be initiated. Once the statute of limitations expires, the claim is typically barred forever.
Settlement
An agreement between parties to resolve a legal dispute without going to trial. Settlements typically involve the defendant paying the plaintiff an agreed-upon sum in exchange for dropping the lawsuit.
Discovery
The pre-trial phase in a lawsuit where each party can obtain evidence from the opposing party through various methods including interrogatories, depositions, and requests for documents.
Deposition
Sworn, out-of-court testimony given by a witness or party that is recorded for later use in court proceedings. Depositions are a key part of the discovery process.
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