Certified Professional Public Buyer (CPPB) Practice Test

How is a dispute resolved in arbitration?

1. Through a private jury trial

2. By presenting the dispute to disinterested parties for a decision

3. By negotiation between the parties involved

4. By a mediator who decides the outcome

The correct answer is: By presenting the dispute to disinterested parties for a decision

In arbitration, a dispute is resolved by presenting the case to disinterested parties, known as arbitrators, who listen to both sides and then make a binding decision. This process is distinct from a court trial where a judge or jury makes the ruling based on legal evidence, as it often involves a more informal setting and can be quicker and less costly. The arbitrators review evidence, hear testimonies, and then apply relevant laws or guidelines to reach a conclusion. This method is favored in many contracts, particularly in business contexts, because it allows for a resolution without the complexities of court proceedings. The other options do not accurately describe arbitration. A private jury trial does not exist in the arbitration context, as arbitration does not involve a jury. Negotiation is a separate method of dispute resolution that may happen before or after arbitration but does not determine the outcome like arbitration. Similarly, a mediator facilitates communication and negotiation between parties but does not decide the outcome; this is a core difference between mediation and arbitration.