An arbitration clause is a provision in a contract that requires the parties to resolve disputes through arbitration instead of going to court. This means that if a disagreement arises, the involved parties agree to submit their case to an arbitrator, who will make a binding decision. This process is often faster and less formal than traditional litigation.
Arbitration clauses are commonly found in various agreements, including employment contracts, consumer agreements, and business partnerships. They aim to provide a more efficient way to handle conflicts, reduce legal costs, and maintain confidentiality compared to public court proceedings.