Arbitration is a process used to resolve disputes outside of the courts. In arbitration, both parties in a disagreement agree to submit their case to an impartial third party, known as an arbitrator. The arbitrator listens to both sides and makes a decision that is usually binding, meaning that both parties must accept the outcome and follow it.
The word "arbitration" comes from the Latin word "arbitratio," which means "the act of giving judgment." It is derived from "arbitrari," meaning "to judge or to consider."