Which principle states that both parties must be heard in disputes?

The principle that states both parties must be heard in disputes is known as "Audi Alteram Partem." This Latin phrase translates to "hear the other side" and is a fundamental concept in the field of natural justice. It emphasizes the importance of fairness in legal proceedings, ensuring that each party involved in a dispute has an opportunity to present their case, respond to evidence, and defend their interests before a decision is made.

This principle is critical in various legal contexts, including administrative proceedings, as it helps prevent arbitrary decision-making and promotes transparency and accountability within the judicial system. By guaranteeing that both sides have the chance to be heard, it supports the right to a fair hearing, which is essential for maintaining trust in legal processes.

In contrast, other options such as "Stare Decisis" refers to the legal doctrine of adhering to precedent, guiding courts to follow established rulings in similar cases. "Lex Loci" pertains to the law of the place where a contract is made or a legal action occurs. "Ex Parte" describes situations where one party is present in a legal proceeding without the other, which does not align with the principle of ensuring both parties are heard.