Going to court is not the only way to deal with business disputes. In fact, smart business owners realize that avoiding the courtroom is good both for business relationships and the bottom line. One popular method of alternative dispute resolution is arbitration.
Arbitration and litigation have much in common, other than arbitration happens outside the courtroom. According to FindLaw, you can arbitrate any dispute that you like, so long as the other party agrees to it.
What makes arbitration different?
Arbitration and litigation are similar in that both involve a “judge” figure handing down a ruling about the dispute. What makes arbitration different is that the feuding parties get to select who the arbitrator or arbitrators are.
The rules governing arbitration are wildly different depending on the situation. In contrast, courtrooms are much more regulated. In some situations, having hand-picked arbitrators and special rules helps the feuding parties finalize their remedies much quicker than in a traditional courtroom. Arbitration is popular for the speed it provides, which also ends up making managing disputes much cheaper for both parties in the majority of circumstances.
Is there any dispute that I cannot arbitrate?
You can arbitrate virtually any disagreement or legal issue, provided that it is not a criminal matter. However, both parties need to agree to arbitration in order for it to take place. Just because one party wishes to arbitrate, this does not negate the right of the other party to take the dispute to court if they so wish.
If you have a general preference for arbitration, it is smart to work it into the contractual language of your business agreements. This way, you will have a clear path to arbitration if there are any disputes.