Arbitration; Arbitration Clause; Arbitration Agreement; Alternative Dispute Resolution

When two companies begin to do business with each other, one of the last things that either company wants to consider is this:  What happens if a dispute arises and the debtor and creditor disagree about whether or not the debt is owed. Arbitration has somethings in common with a trial.  However, arbitration progresses more quickly and with less formality and at a lower cost than a court trial.

One way to address disputes with as little damage to the overall business relationship may be aided by including an Arbitration Agreement or clause in the contract.  Arbitration is a form of alternative dispute resolution.  It is a technique for resolution of disputes that does not use the Courts.  Arbitration involves dispute resolution in which the parties use an independent arbitrator or arbitrators to act in place of a judge or jury to settle disputes.

Arbitration can be a cost-effective alternative to lawsuits. Arbitration is faster, requires less preparation time, and allows the parties to meet with the Arbitrator sooner than a Court date would be made to hear civil litigation.  As a result, the Arbitrator's decision is made more quickly than if the dispute went to trial.  For it to be meaningful, the Arbitrator's judgment should be binding on both parties. An Arbitrator should have the required training, and should be familiar with industry practices, contracts, and applicable State and Federal laws. Arbitration, as a dispute resolution process, is usually specified in a contract or initial agreement as the method by which the seller and buyer agree to resolve disputes that may arise from time to time.

© 2011 by Michael C. Dennis.  All Rights Reserved.  Mr. Dennis is the author of "1001 Collection Tools and Tips"  and he can be reached by email at mcdennis13@yahoo.com