Define the term arbitration.

Arbitration is a method of resolving disputes outside of court, where parties present their case to a neutral third party (arbitrator) who makes a binding decision on the matter. It is a form of alternative dispute resolution that is often used in commercial and labor disputes.

Arbitration is a form of alternative dispute resolution (ADR) in which the parties to a dispute agree to submit their dispute to a neutral third party, known as an arbitrator, for a binding decision. Unlike mediation, where the mediator facilitates a settlement between the parties, the arbitrator acts as a judge and makes a decision that is legally binding on both parties. Arbitration is often used to resolve disputes in commercial contracts, construction contracts, and employment agreements.