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The hearing and determination of a contract
dispute by an impartial third party (called an arbitrator or arbiter).
The arbitrator is selected by the disagreeing parties or by legal
authority.
Many unions and guilds in the music industry (e.g., AFTRA,
AGVA, ARA, and SGA) provide that disputes concerning interpretation
and alleged breaches of contracts be submitted to arbitration.
In some contracts, the American Arbitration Association is
designated as the arbitrator. If so, the arbitration proceedings
would be carried out according to American Arbitration Association
guidelines called the "Code of Ethics and Procedural Standards."
Another way to choose the arbitrator is to have each party choose
a representative and the two representatives then choose an independent
third party. These three then decide by majority vote as to the
outcome of the dispute. When independent arbitrators are used,
they may, or may not (according to prior contractual agreement),
carry out their duties according to American Arbitration Association
guidelines.
In arbitration, the disputing parties agree to abide by the
arbitrator's decision (called an "award") in advance
of the hearing (usually by written contract). The arbitrator is
not bound by the strict rules of law or equity. One advantage
of an arbitrated settlement is that it does not involve lengthy
and costly court proceedings. Corporations, however, will often
resist arbitration holding their view that arbitration decisions
tend to favor individuals over corporations and compromise over
rendering decisions based on technical principals of the law.
Another down side is that arbitration does not set precedent in
law as may be the case in court judgments. Also, arbitration remedies
may be hard to implement if the losing party refuses to comply.
In this situation, court action may be the end result anyway.
See: MEDIATION, EQUITY, SETTLEMENT, DAMAGES, JUDGMENT,
REMEDY, RESTITUTION, CONTRACT,
CONTRACT-A CLOSER LOOK,
CONTRACT-CLUB CONTRACT,
CONTRACT-RECORDING CONTRACT clause #50, CONTRACT-SONGWRITER/PUBLISHER
CONTRACT clause #40, CONTRACT-BUYER/VENDOR CONTRACT clause #19,
COPYRIGHT LAW under "Copyright
Royalty Tribunal."
An agreement that states that all parties
involved in a contract dispute are obligated to comply with an
arbiter's resolving decisions. See: CONTRACT-RECORDING
CONTRACT clause #50, CONTRACT-SONGWRITER/PUBLISHER CONTRACT clause
#40, CONTRACT-BUYER/VENDOR CONTRACT clause #19.
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