Alternative dispute resolution means settling or trying to settle legal disputes without litigation. Common forms of alternative dispute resolution include negotiation, mediation and arbitration. These range from informal to formal to the extent of being trial-like. The common denominator of alternative dispute resolution methods is that they are typically faster and cheaper than full-on litigation and that they allow the parties to control the process more so than in litigation.
Because of the efficiency of alternative dispute resolution methods, many contracts require one or more ADR methods be used to settle disputes. For example, a contract may require that the parties go to arbitration administered under the auspices of the American Arbitration Association rather than going to standard civil court.