award
Definition
An award is the final decision made by an arbitrator or panel of arbitrators after hearing both sides of a dispute outside of court. Think of it like a judge's ruling, except it comes from a private referee that both parties agreed to use instead of the traditional court system. Once an arbitrator issues an award, it is typically legally binding and very difficult to appeal or overturn.
Example
Your contract with a supplier requires arbitration for disputes, so when a disagreement over payment arises, the arbitrator issues an award ordering your supplier to refund you $15,000.
Watch Out
Many business contracts contain clauses requiring arbitration, which means you could be bound by an award with very little ability to challenge it even if you believe the decision was wrong.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.