Now that we know what Arbitration is, let’s dig into the nitty gritty.
Arbitration can be binding or non-binding. Binding arbitration means that the parties of the dispute have to accept the decision of the arbitrator as far as what happens with the dispute – what the parties have to do and who pays whom any money, or any other details, and then the dispute is over. Non-binding arbitration is really just advice as to how the arbitrator thinks things should be resolved.
Binding arbitration is usually but not always the result of an Arbitration Agreement. This is a legal document that requires the parties to arbitrate certain claims between them rather than filing lawsuits and suing each other if there is a dispute. If you signed an arbitration agreement with someone or something you may be required to arbitrate problems rather than filing a lawsuit. Even if you don’t have to arbitrate you still can, but should you? Find out in our next installment.