Certified Public Procurement Officer (CPPO) Practice Test 2025 - Free CPPO Practice Questions and Study Guide

In contract disputes, the nature of the arbitrator's results is characterized as binding. This means that once the arbitrator has made a decision regarding the dispute, both parties are legally obligated to adhere to the terms of that decision. Arbitration serves as an alternative dispute resolution mechanism that provides a structured process for resolving conflicts outside of the court system.

The binding nature of arbitration is crucial because it offers parties certainty and finality in the resolution process. They cannot appeal the arbitrator's decision in most cases, which distinguishes arbitration from traditional legal proceedings where appeal options exist. This characteristic is what makes arbitration a preferred method for many organizations and individuals, as it often leads to a swifter resolution compared to court litigation.

In contrast, the other options imply varying levels of enforceability or optionality. For example, if the results were merely suggestive or negotiable, that would imply that the parties could choose whether or not to follow the arbitrator's decision, undermining the effectiveness of the arbitration process. Similarly, non-binding results would indicate that the parties are free to disregard the arbitrator's decision, which does not reflect the standard framework and expectations set in arbitration agreements.