what is the purpose of arbitration during a contract dispute? The purpose of arbitration during a contract dispute is to provide an alternative and more streamlined method of resolving conflicts outside of the traditional court system. It serves as an efficient, cost-effective, and less formal means of settling disputes. In arbitration, a neutral third party, known as an arbitrator, is chosen by the disputing parties to hear the case, review evidence, and make a binding decision. The process is often quicker than litigation, and it offers a degree of confidentiality. Arbitration can be particularly advantageous when the parties wish to maintain a working relationship, as it tends to be less adversarial. It allows for a tailored resolution, ultimately saving time and resources while reducing the burden on the court system.