Arbitration Clause
A contract provision requiring disputes between the parties to be resolved through private arbitration instead of a public court lawsuit.
Arbitration is generally faster and more private than traditional litigation, with a neutral arbitrator (rather than a judge or jury) deciding the outcome, and the process and appeal rights differ meaningfully from a standard court case.
Financing agreements commonly include an arbitration clause, so reviewing how disputes would actually be handled, including where arbitration would take place and under what rules, is worth understanding before signing.
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