What is the process called when a contract dispute is resolved by an objective third party?

The process of resolving a contract dispute through an objective third party is known as arbitration. In arbitration, the disputing parties agree to submit their conflict to a neutral arbitrator or a panel of arbitrators, who then review the evidence and make a binding decision. This process is characterized by its formality and resembles a court proceeding but is typically less formal and can be more expedient.

Arbitration is advantageous in that it allows both parties to avoid the lengthy and often expensive process of litigation in court. The decision made by the arbitrator is final and enforceable, providing a clear resolution to the dispute. This contrasts with mediation, where a mediator facilitates discussion between the parties to reach a mutually agreeable solution but does not impose a decision. Negotiation involves direct discussions between the parties to achieve a compromise without third-party involvement. Litigation refers to the legal process of taking a dispute through the court system, which can be more time-consuming and public compared to arbitration.

Thus, the key aspect of arbitration is the binding decision made by an objective third party, which distinguishes it from the other methods of dispute resolution.