In order to be successful in business, owners must be able to identify and plan for legal issues that may affect their interests. The use of Alternative Dispute Resolution methods is an effective way to resolve business disputes effectively and efficiently outside the courtroom. Alternative dispute resolution (ADR) refers to a variety of processes that help parties resolve disputes without a trial. Typical ADR processes include mediation, arbitration, neutral evaluation, and collaborative law. This article addresses the ADR process of arbitration.

Arbitration is a form of alternative dispute resolution (ADR) for the resolution of disputes outside of the court system. Opposing parties submit their dispute to an arbitrator and agree to be bound by the decision of the arbitrator. The third party arbitrator reviews the evidence presented by both parties and renders a decision that is legally binding on both sides and enforceable in the courts.

Arbitration is often utilized for the resolution of commercial disputes. It may also be used in consumer and employment situations where it may be mandated by the terms of the employment or commercial contract.

One should carefully consider any agreement containing a clause for mandatory arbitration prior to execution. Arbitration is often faster than litigation in court and provides parties an opportunity to choose their own decision-maker. However, if mandatory and binding, the parties may waive their rights to have a judge or jury decide their case. In addition, special consideration should be taken where the arbitrator depends upon the corporation for repeat business.

For more information, please contact an experienced attorney at the law firm of Paulson & Paulson, PLC.