Legal Term
Arbitration Clause
Legal Definition
A contractual provision that requires parties to resolve disputes through binding arbitration, a private process where a neutral third party (arbitrator) issues a final decision, rather than through litigation in public courts.
In Plain English
A rule in a contract that says if you have a problem, you must settle it with a private judge outside of court, and you can't sue the company in a public trial.
Example in a Contract
From a DoorDash driver agreement: 'Any controversy or claim arising out of or relating to this Agreement shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award may be entered in any court having jurisdiction.'
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