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What is arbitration?

Alternative dispute resolution refers to the various means of settling legal disputes without going to court. Arbitration is one of those methods, and Tennessee residents may find themselves arbitrating many different legal matters instead of taking them to court. From consumer claims to employment complaints, arbitration is often built into agreements and contracts promulgated by businesses.

For example, when a person contracts with a builder to provide them with a new construction home, the agreement between the parties may include an arbitration clause. That clause may prevent a home owner from suing their builder in court if they believe that their home is deficient or fails to meet the specifications of their building terms. That is because if the homeowner signed the agreement, they agreed to its terms.

Arbitration can only start if the parties to the disagreement agree to the proceedings. One party cannot force another into arbitration: it is only possible to arbitrate legal claims if all involved are willing to use its processes. In some cases, arbitration clauses may be built into purchase documents for consumer goods, which means that if a consumer is hurt or suffers losses from a product, they must arbitrate because they agreed to do so through the purchase of the allegedly defective product.

Arbitration relies on the presence of a third party or multiple third parties to help individuals work out their legal differences. While arbitration does not happen in a court room it may produce outcomes that bind parties to legal obligations. Those who have additional questions about arbitration, alternative dispute resolution and other business matters should contact their legal representatives as this post is informational and not legal advice.

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