arbitration

ar-bih-TRAY-shun /ˌɑːrbɪˈtreɪʃn/
nounC1GMATLSAT
LegalBusiness

The use of an arbitrator to settle a dispute.

Arbitration is usually 'binding', meaning the parties must follow the arbitrator's decision as if it were a court order.

The story behind the word. From the Latin 'arbiter', meaning a person who goes somewhere as a witness or a judge. It implies someone who 'comes in' from the outside to see the truth.

Word relationships

  • adjudication: Adjudication is the formal legal process in a court; arbitration is a private alternative.
  • litigation: Litigation is the process of taking a case to a public court.

Commonly confused with

  • mediation: An arbitrator makes a decision for you; a mediator helps you make your own decision.

Word family

  • arbitrate (verb): To act as an arbitrator.
  • arbitrator (noun): The person appointed to settle the dispute.

Collocations

  • binding arbitration
  • arbitration clause
  • submit to arbitration

Example sentences

  • "The union and the company finally agreed to go to binding arbitration to end the strike." Labor Dispute
  • "Most modern employment contracts include an arbitration clause to avoid costly litigation." Contract Law

Memory hook

An Arbitrator is like a 'Bit' of a judge. They make the final 'bit' of the decision. The final word.

When not to use

Do not confuse with 'mediation', which is usually non-binding.

Fun facts

  • The word 'arbitrary' comes from the same root, but it has come to mean 'random' or 'whimsical', whereas 'arbitration' implies a reasoned decision.

Related words

mediation, neutrality

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