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In this video, the concept of arbitration is explained as a system of private justice, distinct from court proceedings. The scenario involves Patti and David, who have a contractual dispute. Rather than going to court, they choose to resolve their issue privately by engaging an arbitrator, Alan, who acts as a private judge. By agreeing to arbitration, Patti and David meet at Alan's office where they present their evidence. After reviewing the case, Alan decides in favor of Patti, awarding her $5,000. Consequently, David is obligated to pay the awarded amount, illustrating how arbitration serves as an alternative dispute resolution method outside the court system.
