CBN Ethical Standards & Professionalism 2 — Questions and Answers
Question 1: A negotiator discovers mid-deal that their client withheld material information from the other party. What is the most ethical course of action?
- Continue negotiating without disclosure to protect client confidentiality
- Advise the client to disclose the information or withdraw from representation (Correct answer)
- Disclose the information directly to the other party without the client's knowledge
- Proceed and document the omission in internal files only
Correct answer: Advise the client to disclose the information or withdraw from representation
A professional negotiator must advise the client to correct material omissions or withdraw rather than facilitate deception.
Question 2: Which concept best describes the ethical obligation to keep negotiation communications confidential when explicitly agreed upon?
- Fiduciary duty
- Duty of candor
- Duty of confidentiality (Correct answer)
- Duty of loyalty
Correct answer: Duty of confidentiality
The duty of confidentiality requires negotiators to protect sensitive information shared within an agreed-upon confidential framework.
Question 3: A negotiator uses a bluff by overstating their client's alternatives to gain leverage. This practice is generally considered:
- Fully ethical because all negotiators bluff
- Ethically acceptable puffery within accepted negotiation norms (Correct answer)
- A serious ethical violation requiring mandatory disclosure
- Grounds for immediate disqualification from negotiations
Correct answer: Ethically acceptable puffery within accepted negotiation norms
Overstating alternatives is widely accepted as permissible puffery in negotiation, distinct from fraudulent misrepresentation of material facts.
Question 4: What does 'good faith negotiation' primarily require of a negotiator?
- Reaching an agreement regardless of the terms
- Genuine intent to reach a mutually acceptable resolution (Correct answer)
- Disclosing all confidential client information
- Accepting the first reasonable offer presented
Correct answer: Genuine intent to reach a mutually acceptable resolution
Good faith requires sincere engagement in the negotiation process with honest intent, not a guaranteed outcome.
Question 5: When a negotiator has a personal financial interest in the outcome of a deal they are facilitating, this situation is called a:
- Dual mandate
- Conflict of interest (Correct answer)
- Fiduciary breach
- Positional bias
Correct answer: Conflict of interest
A conflict of interest arises when a negotiator's personal stake could compromise their objectivity or loyalty to their client.
Question 6: A negotiator is approached by the opposing party with a request for a private side deal that excludes their own client. The negotiator should:
- Evaluate the offer on its merits before deciding
- Decline and immediately disclose the approach to their client (Correct answer)
- Accept only if the deal ultimately benefits the client
- Report the offer to a neutral mediator
Correct answer: Decline and immediately disclose the approach to their client
Secret side deals that bypass the client violate the duty of loyalty and must be declined and disclosed immediately.
Question 7: Which ethical principle requires a negotiator to avoid making statements they know to be false about material facts?
- Duty of candor (Correct answer)
- Duty of care
- Proportionality principle
- Reciprocity norm
Correct answer: Duty of candor
The duty of candor prohibits deliberate misrepresentation of material facts during negotiations.
CBN Ethical Standards & Professionalism 2
A negotiator discovers mid-deal that their client withheld material information from the other party.
What is the most ethical course of action?