"World Of Warcraft Guide - Duels "

At any time in your travels, you may opt to have a 1v1 duel with another player. You do this by selecting and walking up to him, right click on his portrait and choose the Duel option or by using the /duel command. A duel flag will then appear between himand you. If he accepts the duel, the battle will commence; he will turn hostile and his
name will change colour to red. During this time, all combat rules specific to your server ruleset will apply, such as the spell limitations of control type spells on the PvP server.

The duel does not end until one of two things occur. When one player's hp is reduced to 1 or less, the result of the duel is announced to the area near the duel flag. No deaths actually occur and the defeated player is simply set to 1 hp. The duelling area is a large area of roughly 50 yards centered on the duel flag. If one player leaves the
duelling zone for more than 10 seconds, he is considered to have forfeited the duel. Alternative, a player may also use /forfeit command. The results of this will also be announced to other players nearby.

There is no penalty for winning or losing a duel except that both parties have to spend some time after the battle to heal their hp and mana.