Arbitration is a dispute resolution process where a neutral third party hears positions and makes a decision that may be binding or non-binding.

Arbitration is a dispute resolution process where a neutral third party hears positions and makes a decision that may be binding or non-binding.

• A. Mediation
• B. Arbitration
• C. Negotiation
• D. Litigation

Answer: (B)

Arbritration is defined by a private, neutral third party who hears both sides and issues a decision after evaluating the evidence and arguments presented. This decision, often called an award, can be binding or non-binding depending on the agreement or rules governing the dispute. The key point is that arbitration sits between informal resolution methods and formal court litigation: it is more formal than negotiation or mediation, because a decision is made by an arbitrator, but it is typically less formal than going to court. In contrast, mediation involves a facilitator who helps the parties reach their own agreement—no binding decision is imposed. Negotiation is direct discussion between the parties without a third party. Litigation is the public court process where a judge or jury renders a binding decision following formal procedures. The statement aligns with arbitration by emphasizing a neutral party, the hearing of positions, and the potential for a binding (or non-binding) outcome.

Arbritration is defined by a private, neutral third party who hears both sides and issues a decision after evaluating the evidence and arguments presented. This decision, often called an award, can be binding or non-binding depending on the agreement or rules governing the dispute. The key point is that arbitration sits between informal resolution methods and formal court litigation: it is more formal than negotiation or mediation, because a decision is made by an arbitrator, but it is typically less formal than going to court.

In contrast, mediation involves a facilitator who helps the parties reach their own agreement—no binding decision is imposed. Negotiation is direct discussion between the parties without a third party. Litigation is the public court process where a judge or jury renders a binding decision following formal procedures. The statement aligns with arbitration by emphasizing a neutral party, the hearing of positions, and the potential for a binding (or non-binding) outcome.