Final answer:
Businesses prefer mandatory arbitration because it is more efficient, cost-effective, and provides a private means of resolving disputes with final and binding decisions, avoiding the drawbacks of litigation.
Step-by-step explanation:
The primary reason businesses favor the use of mandatory arbitration clauses to resolve customer disputes is that arbitration provides a more efficient and cost-effective alternative to traditional litigation. Mandatory arbitration clauses are often used to ensure that disputes are resolved outside of the court system, which can be expensive and time-consuming. Arbitration proceedings are typically private, which can help protect a company's reputation, and they are conducted by an impartial arbitrator whose decision is usually final and binding, reducing the risk of prolonged legal battles.
Furthermore, arbitration can be tailored to the specific needs of the business, allowing for specialized knowledge and faster resolution times. This can be especially beneficial in cases where technical or industry-specific expertise is required. By opting for arbitration, businesses can maintain better control over the dispute resolution process, which can lead to more predictable and satisfactory outcomes.