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Frequently Asked Questions

Why is binding arbitration more common than non-binding arbitration?

Binding arbitration is more common than non-binding arbitration due to several reasons. The primary reason is the finality and enforceability of the decision. In binding arbitration, all parties involved are legally obligated to adhere to the arbitrator's final decision. If they fail to do so, the decision can be enforced by the court system. This provides a definitive resolution to the dispute, which is not the case with non-binding arbitration where a party can reject the arbitrator's decision and take the disagreement to court, prolonging the dispute resolution process. Another reason for the prevalence of binding arbitration is the inclusion of arbitration clauses in contracts. These clauses stipulate that any disputes between the parties must be resolved through arbitration, keeping them out of court. This is a common practice in business and commercial contracts, as well as contracts between individuals. Companies prefer this method as it allows them to resolve disputes swiftly and quietly, avoiding time-consuming and expensive legal proceedings.

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