Define "arbitration" as an alternative dispute resolution method.

Arbitration is defined as a process in which a neutral third party, known as an arbitrator, is engaged to make a decision in a dispute between parties. This process is typically used as a form of alternative dispute resolution (ADR) to help avoid the formalities and complexities of court proceedings. The critical aspect of arbitration is that the arbitrator’s decision is binding, meaning that the parties are obligated to adhere to the outcome as they would a court judgment.

In arbitration, the parties present their cases, provide evidence, and make arguments. The arbitrator then assesses this information and renders a decision that is enforceable by law. This binding nature of arbitration is one of its main appeals; it provides a clear resolution to disputes without the possibility of further appeals, as one might have in the court system.

Understanding this process is beneficial for individuals and organizations looking for efficient, cost-effective, and definitive ways to resolve disputes outside the court environment. Other choices do not capture the essence of arbitration accurately; they either describe negotiation processes, indicate that arbitration is mandatory (which it is not in all cases), or state that decisions are non-binding, which misrepresents the fundamental characteristics of arbitration.