Arbitration is a method of settling disputes without either party having to go to court. This involves a neutral third party who receives evidence, hears the arguments and then passes an order known as an award. The award is final and impartial. Usually, agreements entered into by businesses contain an arbitration clause that states that any disputes arising of a contractual nature between the parties would be referred to a select arbitrator in a select location. Arbitration is an excellent alternative to litigation.