16.
Jessica manufactures components for a product. She has sued one of her customers, Michael, in the United States for payment. Michael claims that the components that Jessica delivered were defective. They are now negotiating a possible settlement. Jessica is asking the court to award her 400,000 in damages and she agreed to pay her attorney a 30% contingency fee. There is a 50% chance that she will win. If they go to court, she estimates that Michael’s attorney’s fees will total 80,000. Based on a decision tree calculation, the value of Jessica’s litigation BATNA based only on these facts is (select one):
400,000.
280,000.
200,000.
140,000.
110,000.
none of the above.
117.
Samefacts as #16, except that Jessica files her lawsuit outside the US in a
country that uses a “loser pays” rule. Instead of hiring her attorney
on a contingency fee, she agrees to pay the attorney a fixed fee of
90,000. Based on a decision tree calculation, the value of Jessica’s
litigation BATNA based on these revised facts is (select one):
200,000.
155,000.
115,000.
110,000.
70,000
none of the above.
118.
Harineeis negotiating to sell her car to Sam. During negotiations, Sam asks
Harinee whether the car has ever been damaged in an accident. Harinee
says “absolutely not.” This is a lie. She was involved in a serious
accident in which a passenger in her car was killed. After the accident
she had the car completely repaired and the damage is not noticeable.
Based on Harinee’s answer, Sam bought the car but later discovered the
lie. Harinee has violated which of the following legal rules (select
one):
fiduciary duty
unconscionability
fraud
all of the above
two of the above
none of the above
119.
Markworks in sales for Company X and is paid a commission on his sales.
After negotiations he enters into a contract to sell a product to a
customer at a price that is much higher than what other sales people
could negotiate. His boss sends Mark an email stating that she is very
pleased with the deal. Despite the high price, the customer is also
pleased with the deal and pays Mark a bonus. When Mark’s company later
learns about the bonus the company (select one):
can refuse to pay his commission because the unconscionability rule.
can refuse to pay his commission because of the fraud rule.
can refuse to pay his commission because of the fiduciary duty rule.
can refuse to pay his commission because of the Golden Rule.
in this situation, must pay the commission.
none of the above
120.
To increase your power in a negotiation you should (select one):
always make the first offer.
use reactive devaluation.
rely on confirming evidence when preparing for the negotiation.
ask the other side lots of questions
use overconfidence when making decisions relating to the negotiation.
none of the above
121.
Your BATNA strategy should always include (select one):
disclosing your BATNA.
weakening the other side’s BATNA.
strengthening your BATNA.
all of the above.
two of the above.
none of the above.
122.
CompanyA hired Nick as an agent and gave him a letter authorizing him to make
purchases on behalf of the company. In a separate email, the company
explained to Nick that he could only make purchases for 100,000 or less.
In other words, 100,000 was the reservation price for his negotiations.
Nick proceeded to negotiate a contract with a new supplier, B, in which
he purchased goods for 95,000. Nick showed B the letter of authority
from the company but did not mention the 100,000 limitation that the
company explained in the email. Select one:
Company A is bound by the contract because Nick had express authority.
Company A is bound by the contract because Nick had apparent authority.
Company A is not bound by the contract because of illegality.
Company A is not bound by the contract because of unconscionability.
Company A is not bound by the contract because of fraud.
none of the above.
123.
Same fact as #22, except that Nick agreed to pay 105,000 in the contract with B. Select one.
Company A is bound by the contract because Nick had express authority.
Company A is bound by the contract because Nick had apparent authority.
Company A is not bound by the contract because of illegality.
Company A is not bound by the contract because of unconscionability.
Company A is not bound by the contract because of fraud.
none of the above
124.
The best way to avoid the fixed pie assumption is to (select one):
devalue proposals made by the other side.
use a large stretch goal.
search for interests of both sides that aren’t in conflict.
all of the above.
two of the above.
none of the above.
125.
Eshanis preparing for a negotiation to sell his house to Jose. He thinks
that the ZOPA range is 250 to 300 when it is really 225 to 325. This is
an example of (select one):
reactive devaluation.
overconfidence.
the contrast principle.
all of the above.
two of the above.
none of the above.
126.
Malavicais negotiating to purchase some equipment from Eric for her start-up
business. During the negotiation she makes a concession to Eric
regarding the delivery date. (The delivery date requested by Eric caused
no problems for Malavica.) In gratitude for her concession, Eric agrees
to extend the warranty on the equipment he is selling her for an
additional time period. This is an example of (select one):
anchoring.
reciprocity.
availability.
all of the above.
two of the above.
none of the above.
127.
Baileyrecently moved to France and is negotiating the purchase of a house in a
suburb of Paris from a French owner. She has retained her US
citizenship. Her contract is governed by (select one):
civil law.
common law.
the United Nations Convention on Contracts for the International Sale of Goods.
the Uniform Commercial Code.
all of the above.
none of the above.
128.
Jingis negotiating to sell her business to Pedro. They have reached
agreement on most of the terms of the sale and have just signed an
agreement in principle. Agreements in principle are (select one):
always binding contracts.
never binding contracts.
can be binding contracts, depending on the circumstances.
statements summarizing the ethical beliefs of the two sides.
two of the above.
none of the above.
129.
Sarahsigned an agreement to rent an apartment from a landlord who also
signed the agreement. During the lease negotiations, the landlord agreed
to provide Sarah with extra storage space in the basement of the
apartment building but this promise was not included in the agreement.
The landlord now tells Sarah that he will not provide the extra space.
If the landlord admits making the promise, under the parol evidence rule
(select one):
he is legally required to provide the extra space because consideration is missing.
he is legally required to provide the extra space because of his fiduciary duty to Sarah.
he is legally required to provide the extra space because of the overconfidence trap.
all of the above.
two of the above.
none of the above.
130.
Afterboth sides signed the lease in #29, the landlord asked Sarah if she
would be willing to delay the move-in date by two days. She agreed and
they amended the lease. In this situation (select one):
there is no consideration for Sarah’s additional promise.
there is consideration for Sarah’s additional promise because of the illegality principle.
there is consideration for Sarah’s additional promise because of fiduciary duty requirements.
all of the above.
two of the above.
none of the above.
131.
Kathryn and Jose are involved in a business dispute that is going to arbitration. In the typical arbitration (select one):
the arbitrator acts as a facilitator.
the arbitrator decides who wins and who loses.
the arbitrator attempts to bring the parties together to transform their relationship.
all of the above.
two of the above.
none of the above.
132.
In#31, Kathryn and Jose decide to try mediation instead of arbitration.
They can select one of the following, which are the typical types of
mediation (select one):
faciliative.
baseball.
evaluative.
all of the above.
two of the above.
none of the above.
133.
In#31, assume that Kathryn and Jose are trying to decide whether to
resolve their dispute either by one-on-one negotiation or by mediation.
Negotiation and mediation are similar except that with mediation (select
one):
a third party is present to make a decision.
witnesses testify under oath.
mediators generally follow court procedure.
all of the above.
two of the above.
none of the above
134.
Jedis negotiating a business deal with Steve. They think that there might
not be a ZOPA, in which case they are wasting their time. The best
process for finding out whether there is a ZOPA is (select one):
avoidance.
arbitration.
mediation.
all of the above.
two of the above.
none of the above.
135.
In every price negotiation, there is (select one):
a ZOPA.
a BATNA.
a reservation price.
all of the above.
two of the above.
none of the above.
136.
If the losing party in an arbitration appeals the decision to the court system, the court will (select one):
always review the decision.
never review the decision.
in some situations review the decision.
incarcerate the losing party.
usually order a new arbitration.
two of the above.
137.
Arbitration is very similar to litigation except that with arbitration (select one):
you and the other side select your own third party (the arbitrator).
the proceedings are private.
the technical rules of litigation are not followed.
all of the above.
two of the above.
none of the above.
138.
ADR screens are used to (select one):
decide whether to use an ADR pledge.
decide whether to use a binding or a non-binding process when resolving a dispute.
hide your BATNA from the other side.
all of the above.
two of the above.
none of the above.
139.
The following statement(s) is (are) correct (select one):
You should always ask the other side to make the first offer.
When negotiating with an agent who represents the other side, you should always ask the agent to confirm that she has authority to represent the other side.
You should never reveal your BATNA to the other side.
all of the above.
two of the above.
none of the above.
140.
Mariais the head of human resources for a mid-size company. She is involved
in a budget dispute with Max, the head of the finance department. Max
wants to cut back on Maria’s budget for next year. Maria claims that she
needs the current budget to meet the HR needs of the three other
departments in the company (information technology, operations, and
marketing). This is an ideal situation for Maria to use (select one):
apparent authority.
coalition building.
reactive devaluation to devalue the proposal made by Max.
all of the above.
two of the above.
none of the above.
141.
Aashkais negotiating to sell her car to Juana. During the negotiation, Aashka
tells Juana that someone else has offered to purchase the car for 5000.
In fact, no one else has made an offer to purchase the car. Based on
Aashka’s statement, Juana agrees to purchase the car for 5200. If Juana
later learns of Aashka’s lie and decides to sue her: (select one):
She cannot recover damages for fraud because she should expect sellers to use this type of deception.
She can recover damages because Aashka breached her fiduciary duty.
She can recover her attorney fees from Aashka if she litigates the case in the United States and wins.
all of the above.
two of the above.
none of the above.
142.
Peterand Michelle are recent business school graduates with very few
resources. They decided to start a business as partners. Michelle was a
much better negotiator than Peter (because she had taken a MOOC called
“Successful Negotiation”!). She persuaded Peter to sign a partnership
agreement that was extremely unfair to him. He should be able to back
out of the agreement because (select one):
Michelle committed fraud.
the agreement is unconscionable.
Michelle breached the anchoring rule.
all of the above.
two of the above.
none of the above.
143.
Decision trees can be used to (select one):
calculate BATNAs in dispute-resolution negotiations.
calculate BATNAs in deal-making negotiations.
develop attractive landscaping in parks.
all of the above.
two of the above.
none of the above.
144.
Youare a consultant. Company M has been involved in a number of disputes
with its suppliers and customers. The company hires you to establish an
ADR system. As part of this system you should consider encouraging the
company to (select one):
adopt an ADR pledge.
use screens to select an appropriate dispute-resolution process.
include ADR clauses in contracts with its suppliers and customers.
all of the above.
two of the above.
none of the above.
145.
Inthe “House on Elm Street” negotiation, if Tracy did not tell Pat that
the basement might have a leak, this would be an example of (select
one):
unconscionability.
breach of fiduciary duty.
illegal use of a BATNA.
all of the above
two of the above
none of the above
