What is arbitration? Was it Shakespeare who mused about killing all the lawyers? Henry the 6th or something? Hmmm…
Well if he’d done so, that’d make arbitration…not necessary.
So first…what IS arbitration? Well, basically it’s the adjudication of a case outside of the formal normal court system, which is massively clogged in the U.S....like, needs-a-million-gallon-enema kind of clogged.
The cost of fully adjudicating cases (that is, pursuing a lawsuit all the way to a judgement) has become astronomically expensive, not to mention time consuming. The process is also filled with silly loopholes that make getting to a real conclusion painful, if not impossible.
So it has become common practice for parties entering a partnership or contract in whatever form to agree to arbitration if a big fat hairy conflict arises down the road. In arbitration, both sides just hire their own separate judge…usually a retired judge from the normal court system with a lot of miles on her tires.
In arbitration, everyone simply relies on the arbitrating judge to be… fair. Lots of silly loopholes go away and quote justice unquote in whatever form is arrived at…faster. And if that doesn’t work…you can always do things the Shakespeare way.
Related or Semi-related Video
Finance: What is a Commitment Letter?5 Views
Finance a la shmoop what is a commitment letter? dear Rebecca it's been fun and
all but asking me to move in with you was a real turnoff so uh have a nice [Rebecca reading letter]
life yeah that would be a fear of commitment letter I know that one well
well so what's a commitment letter then all right well you need dough but you
don't need it today you need it in six months when construction is finished on
your cabin by the lake at that point you'll convert your very expensive
building loan into a normal mortgage well you can go to the bank and for a [Man walks into bank]
small ish fee get a commitment letter from them which stipulates that assuming
nothing material changes between now and then you will in fact then get a loan
for one hundred fifty two thousand dollars at 5 percent fixed interest rate
for 30 years the bank is then committed to giving you that loan when you know [Contract stamped with committed]
eventually you need it that way you don't have to worry about your bank you
know breaking up with you which is nice because it's tough getting
the It's not you it's me speech from a guy in a bowtie [Man wearing bow tie talking to a man in the bank]
Up Next
What is Arbitration? Arbitration is like court for the financial world. It is used to settle disputes between investors and their brokers. An inves...
What is Contingent Liability? Contingent liability refers to a possible liability in the future contingent upon some other event being the trigger....
What is a Cooling-Off Period? The number of days in an IPO between when the prospectus is filed and trading commences is referred to as a `cooling...
What is a Comfort Letter? When a company’s books are being audited, when new pending issue securities are revising their financials to meet compl...