# the value of Jessica’s litigation BATNA based only on these facts is, multiple choice help

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.

1
point

17.

Same

facts 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.

1
point

18.

Harinee

is 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

1
point

19.

Mark

works 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

1
point

20.

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

1
point

21.

Your BATNA strategy should always include (select one):

weakening the other side’s BATNA.

all of the above.

two of the above.

none of the above.

1
point

22.

Company

A 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.

1
point

23.

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

1
point

24.

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.

1
point

25.

Eshan

is 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.

1
point

26.

Malavica

is 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.

1
point

27.

Bailey

recently 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.

1
point

28.

Jing

is 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.

1
point

29.

Sarah

signed 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.

1
point

30.

After

both 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.

1
point

31.

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.

1
point

32.

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.

1
point

33.

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.

all of the above.

two of the above.

none of the above

1
point

34.

Jed

is 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.

1
point

35.

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.

1
point

36.

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.

1
point

37.

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.

1
point

38.

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.

1
point

39.

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.

1
point

40.

Maria

is 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.

1
point

41.

Aashka

is 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.

1
point

42.

Peter

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.

1
point

43.

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.

1
point

44.

You

are 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):

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.

1
point

45.

In

the “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