Arbitration Parties Dispute Agree Eslpod Legal Binding Courts

"Binding arbitration" is a way for two parties to end a dispute without involving the courts. In binding arbitration, the parties "refer" (send for consultation) their dispute to a "third party" (another person who is not involved in the dispute) for arbitration, and that person's decision is "binding" (something that people must agree to, and that cannot be changed).

The Federal Arbitration Act, "enacted" (made into law) in 1925, "governs" (has control over) arbitration for "interstate" (between states or countries) "commerce" (business; buying and selling). The parties must agree that the arbitration" (there is no way to undo the arbitrator's decision), and they must agree to the arbitration "in lieu of" (instead of) going to the courts. The "Supreme Court" (the most powerful court in the United States) has made it clear that the arbitrator's decision is "final" and cannot be "appealed" (sent to another person or court for review and a new judgment).

The arbitrators are usually a single individual or a "tribunal" (a small group) of three people. The arbitrators might be selected and "appointed" (named to a particular position) by the parties involved in the dispute, but the arbitrator should be a "neutral" (without favoring one side or the other) third party, without any "conflict of interest" (a financial or emotional motivation to behave in a particular way or make a particular decision).

Many businesspeople like arbitration, because they can appoint a technical expert if the dispute involves a lot of technical details. Arbitration is also usually faster, more "discreet" (private; without information being shared with many people), and more convenient than taking the dispute to court. Arbitration fees are often significantly less than the legal fees associated with "retaining" (hiring for service) attorneys.