Certified Professional Public Buyer (CPPB) Practice Test

When is it appropriate to consider arbitration instead of litigation?

1. When both parties prefer a quicker resolution

2. When there is no agreement on the terms of a contract

3. When public opinion may influence the outcome

4. When legal representation is not available

The correct answer is: When both parties prefer a quicker resolution

Arbitration is often considered a more efficient alternative to litigation due to its potential for expedited resolution. When both parties prefer a quicker resolution, arbitration provides a more streamlined process, allowing disputes to be settled in a timely manner without the lengthy processes typical in courts. This is particularly valuable in situations where the parties wish to avoid the congestion of the court system or the unpredictability that can accompany a traditional trial. Choosing arbitration can also mean less formality compared to litigation, leading to a more flexible and faster resolution process, which aligns with the desire for quick outcomes. This choice is beneficial in situations where ongoing business relationships are important, and maintaining a good relationship is crucial. The other options do not appropriately justify the use of arbitration. For instance, if there is no agreement on the terms of a contract, arbitration typically requires a prior agreement to arbitrate, which means that a lack of consensus would complicate the arbitration process. Similarly, if public opinion could heavily influence the outcome, parties might opt for litigation to utilize the courts’ structured and formal processes to mitigate these concerns. Finally, the unavailability of legal representation does not provide a basis for arbitration; both parties typically should have access to legal advice to navigate the complexities of arbitration effectively.