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Understanding Arbitration Typically, both parties mutually agree to use arbitration to settle disputes before creating a formal relationship. Instead of using a judge at trial, arbitration uses a neutral third-party to analyze the case's facts and circumstances.
Dispute resolution clauses are contract terms that resolve disputes as a non-binding or binding solution. They sometimes include rules that require the parties to engage in alternative disputation, such as mediation and arbitration. The alternative is going to civil court.
Examples of alternative dispute resolution include mediation and arbitration, both of which avoid the courtroom while attempting to resolve disputes between two parties.
What Is a Mutual Agreement to Arbitrate Claims? A mutual agreement to arbitrate claims is a common form of dispute resolution outside of the public court system. Voluntary arbitration agreements have been used for many years to successfully resolve commercial disputes.
Drafting of Dispute Resolution Clauses. Dispute resolution clauses in any contract should be comprehensive and shall be in line with applicable Act or Rule being followed by the parties. All the portions where there are chances of dispute shall be linked to dispute resolution clause.