Arbitration is a form of Alternative Dispute Resolution (ADR) and it is intended to help the parties to resolve the issue without taking the case to the court.
As Abstraction is a peaceful way, it is consensual, that is, all the parties involved in the process must agree to do it before the procedure is started.
The Abstraction clause must also be present beforehand in the contract. It cannot be added afterward to it without the consent of all the involved parties and another signature of the contract, on the same terms described above.
A form of Abstraction is on a wedding contract, where both parts agree what parts of the patrimony belong to each other. On commercial contracts, this clause is often included in contracts that involve the leasing or mortgage. If the leasing party does not pay the referred amount in time, the leaser party may retake the goods leased and no other legal action will be taken.
The clause of Abstraction is one of the best ways to extinguish a contract without appealing to court intervention and spending money at it.
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