Arbitration Act (Federal Arbitration Act)

The Federal Arbitration Act (FAA), enacted in 1925, is a U.S. law that promotes and enforces agreements to arbitrate disputes instead of going to court. Arbitration is a process where a neutral third party, called an arbitrator, resolves disagreements. The FAA ensures that arbitration agreements are recognized as valid and enforceable in federal courts, making it easier for parties to resolve disputes efficiently and without the costs and delays often associated with litigation. The Act reflects a strong federal policy favoring arbitration, which can provide a quicker and less formal way to settle conflicts.