An arbitration agreement is a legal contract that governs the dispute resolution process between two parties. The contract can be binding or non-binding, depending on the type of agreement.
Non-binding agreements are often used for settlement purposes and are still legally enforceable, but they allow both parties to walk away from the agreement if they feel that it does not benefit them.
Binding agreements are more formal and have a higher legal standing. They cannot be walked away from once signed by both parties, but their enforcement is more difficult than with non-binding agreements.