is when both parties request a third party to investigate the issues and make a recommendation. Both parties have agreed in advance to accept the recommendation.

is when both parties request a third party to investigate the issues and make a recommendation. Both parties have agreed in advance to accept the recommendation.

• A. Contract
• B. Arbitration
• C. Caveat emptor
• D. Co-operative relationship

Answer: (B)

Arbritration is a dispute-resolution method where a neutral third party investigates the issues and makes a decision that both sides have agreed in advance to accept. Because the parties commit to be bound by the arbitrator’s ruling, the outcome is usually final and enforceable, offering a faster, private alternative to court. This differs from mediation, where a mediator helps negotiate a settlement but doesn’t impose a binding decision. The other options describe different ideas: a contract is the agreement itself, caveat emptor warns buyers to beware, and a cooperative relationship refers to how parties work together rather than resolving disputes.

Arbritration is a dispute-resolution method where a neutral third party investigates the issues and makes a decision that both sides have agreed in advance to accept. Because the parties commit to be bound by the arbitrator’s ruling, the outcome is usually final and enforceable, offering a faster, private alternative to court. This differs from mediation, where a mediator helps negotiate a settlement but doesn’t impose a binding decision. The other options describe different ideas: a contract is the agreement itself, caveat emptor warns buyers to beware, and a cooperative relationship refers to how parties work together rather than resolving disputes.