Arbitration is another form of resolving disputes outside the courtroom. Although arbitration is less formal than a hearing, it is still more formal and complex than mediation. Most arbitration cases occur because it was previously agreed to by both parties in a clause of a contract. The way arbitration is set up largely depends on the details of the contract. Regardless of the stipulations, both parties will present their case to an arbitrator who will make a final decision which can be either binding or nonbinding.