Question

Paulo includes ______ in his sales contracts so that the parties have an avenue for dispute resolution if the deal goes sour.

a) A clause for personal favors
b) A confidentiality clause
c) An arbitration clause
d) A tax exemption clause

Answer 1

Paulo includes an arbitration clause in his sales contracts to provide an avenue for dispute resolution outside of court.

Step-by-step explanation:

Paulo includes an arbitration clause in his sales contracts to provide a method for dispute resolution if there are any disagreements between the parties involved in the deal. An arbitration clause is a part of a contract that means any disputes will be settled through arbitration, which is an alternative to taking legal action in the courts. Arbitration is considered to be faster, less formal, and often less expensive than litigation. It involves a neutral third-party arbitrator who reviews the case and makes a decision that is usually binding. Unlike personal favors, confidentiality, or tax exemption clauses, an arbitration clause directly addresses the need for a dispute resolution method.