CCNP Ethics in Negotiation 3 — Questions and Answers
Question 1: A contract negotiator learns that the counterpart is under financial distress not publicly known. Exploiting this knowledge without disclosure is most likely considered:
- Legitimate competitive advantage
- Unconscionable conduct if it shocks the conscience (Correct answer)
- Protected negotiation strategy under US law
- Required disclosure under the UCC
Correct answer: Unconscionable conduct if it shocks the conscience
Courts may void contracts as unconscionable when one party exploits the other's severe vulnerability in bad faith.
Question 2: Which action would constitute a material misrepresentation in contract negotiation?
- Overstating enthusiasm for the deal
- Falsely claiming a competing offer exists to drive up price (Correct answer)
- Declining to reveal your walk-away price
- Emphasizing the strengths of your product
Correct answer: Falsely claiming a competing offer exists to drive up price
Falsely claiming a competing offer is a statement of fact that, if untrue, constitutes a material misrepresentation.
Question 3: The concept of 'BATNA ethics' suggests that a negotiator should:
- Lie about their BATNA to gain leverage
- Accurately represent their BATNA when directly asked (Correct answer)
- Reveal their BATNA voluntarily at all times
- Never disclose their BATNA under any circumstances
Correct answer: Accurately represent their BATNA when directly asked
While negotiators need not volunteer their BATNA, directly lying about it crosses the line into deception.
Question 4: An attorney-negotiator has a conflict of interest that could affect their objectivity. Under ABA Model Rules, they must:
- Proceed without disclosure if they believe they can remain objective
- Disclose the conflict and obtain informed client consent or withdraw (Correct answer)
- Only disclose if the conflict is financial in nature
- Disclose only to the opposing party, not the client
Correct answer: Disclose the conflict and obtain informed client consent or withdraw
ABA Model Rule 1.7 requires disclosure of conflicts and informed consent before proceeding.
Question 5: In the context of negotiations, 'strategic ambiguity' becomes unethical when it:
- Allows both parties flexibility in interpretation
- Is used intentionally to mislead the other party about a material term (Correct answer)
- Reflects genuine uncertainty about future conditions
- Leaves minor details open for later negotiation
Correct answer: Is used intentionally to mislead the other party about a material term
Deliberate ambiguity designed to mislead is a form of deception that violates ethical negotiation norms.
Question 6: Which scenario best illustrates the ethical concept of 'false framing' in negotiation?
- Presenting market data selectively to support your position
- Framing a concession as a favor to build reciprocity
- Describing a contract clause using misleading labels that obscure its true effect (Correct answer)
- Anchoring with an aggressive opening offer
Correct answer: Describing a contract clause using misleading labels that obscure its true effect
False framing uses language to disguise the actual nature or consequences of a term, constituting deception.
Question 7: When is it ethically permissible for a negotiator to remain silent about information they possess?
- When the information is material and the other party has not asked
- When disclosure is not legally required and revealing it would harm your client's position (Correct answer)
- When silence would constitute fraud by omission under applicable law
- When the counterpart has superior bargaining power
Correct answer: When disclosure is not legally required and revealing it would harm your client's position
Absent a legal duty to disclose or a direct question, negotiators are generally permitted to maintain confidentiality of information that aids their client.
CCNP Ethics in Negotiation 3
A contract negotiator learns that the counterpart is under financial distress not publicly known.
Exploiting this knowledge without disclosure is most likely considered: