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What Is Arbitration?

Arbitration is a private, informal process by which all parties agree, in writing, to submit their disputes to one or more impartial persons authorized to resolve the controversy by rendering a final and binding award. It is used for a wide variety of disputes­ from commercial disagreements involving construction securities transactions, computers or real estate (to name just a few), to insurance claims and labor­union grievances. When an agreement to arbitrate is included in a contract, it might expedite peaceful settlement without the necessity of going to arbitration at all. Thus, an arbitration clause is a form of insurance against less of good will.

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