Which statement best describes "Arbitration"?

Arbitration is a formal method of resolving disputes outside of the court system, where an impartial third party, known as an arbitrator, hears evidence and arguments from both sides. During arbitration, both parties have the opportunity to present their case, including relevant evidence and witnesses, effectively allowing for a thorough examination of the issues at hand. The arbitrator then makes a binding decision based on the evidence presented.

This process contrasts with other options such as having a judge make the final decision, which hints at a court setting rather than the arbitration framework. Similarly, arbitration does not involve a jury of peers; that is characteristic of a trial. Lastly, while informal discussions might precede arbitration, the arbitration process itself is much more structured and formal, distinguishing it from informal discussions. By allowing both parties to present their viewpoints, arbitration aims to reach a fair resolution based on a comprehensive understanding of the dispute.