An agreement included within a vehicle purchase contract, typically presented by the seller, mandates that any disputes arising from the sale will be resolved through a private, binding process rather than in a court of law. As an example, a buyer discovering undisclosed damage after purchasing a used car might be required to address the matter through a designated arbitrator, whose decision is generally final and legally enforceable, rather than pursuing a lawsuit.
Such clauses are utilized to streamline conflict resolution and reduce expenses associated with litigation for both parties. The potential benefits include a faster and less formal process compared to traditional court proceedings, potentially leading to quicker resolutions and reduced legal fees. Historically, these agreements have become increasingly common in consumer contracts as a way to manage risk and control legal costs.
