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ADR Core Module practice questions

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Question 1ADR Fundamentals, Legal Framework and Policy

Under the EU Alternative Dispute Resolution Directive (2013/11/EU), which requirement must a Member State impose on an ADR entity before it can be listed as a qualified entity?

  1. The entity must charge fees only to the consumer
  2. The entity must be funded entirely by the national government
  3. The entity must be accessible online and offline and offer both parties equal treatment Correct answer.
  4. The entity must employ only judges with ten years of experience

Explanation

The ADR Directive sets quality criteria for ADR entities, including accessibility, independence, impartiality, transparency, effectiveness and fairness. Entities must ensure access by both electronic and non-electronic means and treat parties equally. Funding and staffing are not prescribed in that way.

Question 2ADR Fundamentals, Legal Framework and Policy

What does the acronym ADR stand for in dispute resolution practice?

  1. Adjudicated Decision Ruling
  2. Advanced Determination Route
  3. Administrative Dispute Review
  4. Alternative Dispute Resolution Correct answer.

Explanation

ADR is the standard abbreviation for Alternative Dispute Resolution, referring to processes such as mediation, conciliation, arbitration and early neutral evaluation used to resolve disputes outside litigation. The other expansions are not established terms in the field.

Question 3ADR Fundamentals, Legal Framework and Policy

Which feature most clearly distinguishes arbitration from mediation?

  1. Arbitration can only be used in commercial matters, whereas mediation covers all disputes
  2. Arbitration requires the parties to reach agreement on the outcome, whereas mediation does not
  3. Arbitration produces a binding decision imposed on the parties, whereas mediation facilitates a negotiated settlement Correct answer.
  4. Arbitration is always conducted in public, whereas mediation is confidential

Explanation

Arbitration is an adjudicative process in which an arbitral tribunal issues an award that is generally final and binding. Mediation is facilitative: the mediator helps the parties reach their own agreement and cannot impose an outcome.

Question 4ADR Fundamentals, Legal Framework and Policy

Which international instrument governs the recognition and enforcement of foreign arbitral awards in most jurisdictions?

  1. The New York Convention 1958 Correct answer.
  2. The Singapore Mediation Convention 2018
  3. The Hague Convention on Choice of Court Agreements 2005
  4. The UNCITRAL Model Law on International Commercial Arbitration 1985

Explanation

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted in New York in 1958, is the principal instrument for enforcing arbitral awards across borders. The Hague Convention deals with court judgments, the Model Law is a template for domestic legislation, and the Singapore Convention covers mediated settlements.

Question 5ADR Fundamentals, Legal Framework and Policy

In a mediation, what is the primary role of the mediator?

  1. To gather evidence and prepare the case for trial if mediation fails
  2. To represent the weaker party and advocate for a favourable settlement
  3. To issue a binding ruling on the legal merits of the dispute
  4. To facilitate communication and help the parties explore options for settlement Correct answer.

Explanation

A mediator is a neutral third party who assists the disputants in communicating, identifying interests and generating settlement options. The mediator does not decide the dispute, advocate for one side, or act as an investigator.

Question 6ADR Fundamentals, Legal Framework and Policy

Which concept describes the situation where a neutral third party hears both sides and issues a non-binding opinion on the likely outcome?

  1. Ombudsman investigation
  2. Early neutral evaluation Correct answer.
  3. Binding arbitration
  4. Conciliation

Explanation

Early neutral evaluation involves an independent neutral assessing the merits of each party's case and giving a non-binding view, often to encourage realistic settlement. Arbitration is binding, conciliation is facilitative, and an ombudsman investigation is a distinct complaint-handling mechanism.

Question 7ADR Fundamentals, Legal Framework and Policy

What does the principle of confidentiality typically require of participants in an ADR process?

  1. That the final settlement must be published in full
  2. That the neutral must report the outcome to a regulator
  3. That communications made in the process are not disclosed to third parties or used in later proceedings Correct answer.
  4. That all documents exchanged are filed with a public registry

Explanation

Confidentiality in ADR generally means that what is said and exchanged during the process stays private and is protected from disclosure or use in subsequent litigation or arbitration, subject to limited exceptions such as illegality or public policy.

Question 8ADR Fundamentals, Legal Framework and Policy

Which of the following best describes a voluntary ADR process?

  1. The neutral decides whether the parties may leave the process
  2. The parties are compelled by statute to participate and cannot withdraw
  3. The court determines the outcome regardless of party consent
  4. The parties choose to participate and may generally withdraw at any stage before agreement Correct answer.

Explanation

Voluntariness means the parties enter the process by their own choice and can usually exit without penalty before a settlement is reached. Compulsion, neutral control over exit and court-determined outcomes are features of non-voluntary processes.

Question 9ADR Fundamentals, Legal Framework and Policy

A consumer in an EU Member State has a dispute with a trader over a faulty appliance. Under the ADR Directive, which statement about the trader's participation in ADR is accurate?

  1. The trader must be informed of the ADR entity competent to handle the dispute and must state whether it will use it Correct answer.
  2. The trader is automatically bound by any ADR outcome once the consumer files a complaint
  3. The trader must transfer the dispute to arbitration at its own cost
  4. The trader may ignore the consumer's ADR request without any obligation to respond

Explanation

The ADR Directive requires traders to inform consumers of the ADR entity competent to deal with the dispute and to indicate whether they commit to using it. Participation itself is not universally mandatory, but the information duty is.

Question 10ADR Fundamentals, Legal Framework and Policy

Which of the following is a recognised advantage of ADR over litigation?

  1. ADR decisions are always publicly reported and create binding precedent
  2. ADR generally offers greater flexibility, lower cost and faster resolution than court proceedings Correct answer.
  3. ADR removes the need for any legal advice or documentation
  4. ADR guarantees that the dispute will be resolved in the claimant's favour

Explanation

ADR processes are typically more flexible, quicker and less expensive than litigation, and allow parties to choose the neutral and procedure. They do not guarantee outcomes, do not create precedent, and do not remove the value of legal advice.

Question 11ADR Fundamentals, Legal Framework and Policy

In arbitration, what is the 'seat' of arbitration?

  1. The country where the underlying contract was signed
  2. The legal jurisdiction whose procedural law governs the arbitration Correct answer.
  3. The physical chair occupied by the presiding arbitrator
  4. The location where the arbitral award is enforced

Explanation

The seat is the juridical place of arbitration; it determines the procedural law governing the arbitration and the courts that supervise it, such as for setting aside awards. It is distinct from the physical venue of hearings and from where enforcement is sought.

Question 12ADR Fundamentals, Legal Framework and Policy

A contract contains a clause stating that disputes 'shall be referred to mediation before any court proceedings'. What is the usual legal effect of such a clause?

  1. It creates a condition precedent that the parties attempt mediation before litigating Correct answer.
  2. It has no legal effect in any jurisdiction
  3. It automatically converts the dispute into a binding arbitration
  4. It permanently bars the parties from ever going to court

Explanation

Agreements to mediate before litigating are generally treated as enforceable conditions precedent, so a party may be required to attempt mediation before commencing proceedings. They do not permanently exclude the courts, convert the dispute to arbitration, or lack effect everywhere.

Question 13ADR Fundamentals, Legal Framework and Policy

Which body of law primarily governs the conduct of an international commercial arbitration where the parties have chosen London as the seat?

  1. The arbitration law of England and Wales Correct answer.
  2. The New York Convention as a procedural code
  3. The UNCITRAL Model Law directly, without any national statute
  4. The law of the claimant's home state

Explanation

The seat determines the procedural law, so choosing London means the arbitration is governed by the Arbitration Act 1996 of England and Wales. The Model Law applies only where a state has adopted it, and the New York Convention governs enforcement rather than procedure.

Question 14ADR Fundamentals, Legal Framework and Policy

What is the main purpose of an ombudsman scheme in the ADR landscape?

  1. To prosecute traders for criminal breaches of consumer law
  2. To represent consumers in court litigation
  3. To set binding tariffs for the price of goods and services
  4. To provide a free, independent complaint-handling service that can recommend or make redress Correct answer.

Explanation

Ombudsman schemes handle complaints independently and free of charge to the consumer, and may recommend or make awards of redress. They do not prosecute crimes, act as consumer advocates in court, or set prices.

Question 15ADR Fundamentals, Legal Framework and Policy

In which situation would a court most likely refuse to enforce a foreign arbitral award under the New York Convention?

  1. The losing party disagrees with the tribunal's findings of fact
  2. The winning party is a company registered abroad
  3. The award was issued in a language the losing party does not speak
  4. The award deals with a dispute not contemplated by the arbitration agreement Correct answer.

Explanation

Article V of the New York Convention permits refusal where the award exceeds the scope of the arbitration agreement, among other limited grounds. Disagreement with factual findings, language issues and the winner's nationality are not grounds for refusal.

Question 16ADR Fundamentals, Legal Framework and Policy

What distinguishes conciliation from mediation in many legal systems?

  1. A conciliator may take a more active, advisory role and propose settlement terms Correct answer.
  2. Mediation cannot be used in cross-border disputes
  3. Conciliation requires a judge to preside over the process
  4. Conciliation is always binding, while mediation never is

Explanation

Although the terms overlap, conciliation often involves a more proactive neutral who may propose solutions, whereas mediators typically facilitate without proposing outcomes. Neither process is inherently binding, and neither requires a judge.

Question 17ADR Fundamentals, Legal Framework and Policy

Which statement reflects the principle of party autonomy in arbitration?

  1. The arbitrators may override the parties' choice of law without justification
  2. The parties must use the arbitration rules of their home state
  3. The parties may choose the arbitrators, the seat and the rules governing the arbitration Correct answer.
  4. The court selects the arbitrators when the parties cannot agree

Explanation

Party autonomy allows the parties to design their arbitration, including selecting arbitrators, the seat, the language and the institutional or ad hoc rules. Courts and arbitrators generally respect those choices, subject to mandatory rules.

Question 18ADR Fundamentals, Legal Framework and Policy

What is the effect of the Singapore Mediation Convention 2018?

  1. It makes all mediated settlements automatically enforceable as court judgments
  2. It applies only to domestic mediations within Singapore
  3. It provides a framework for cross-border recognition and enforcement of mediated settlement agreements Correct answer.
  4. It replaces the New York Convention for arbitration

Explanation

The Singapore Convention establishes a framework for recognising and enforcing international settlement agreements resulting from mediation. It does not automatically convert them into judgments, does not replace the New York Convention, and is not limited to Singapore.

Question 19ADR Fundamentals, Legal Framework and Policy

A dispute resolution clause states that 'any dispute shall be resolved by arbitration administered by the LCIA'. Which body administers the arbitration?

  1. The American Arbitration Association
  2. The Singapore International Arbitration Centre
  3. The London Court of International Arbitration Correct answer.
  4. The International Chamber of Commerce in Paris

Explanation

The LCIA is the London Court of International Arbitration, which administers arbitrations under its own rules. The ICC, SIAC and AAA are separate institutions with their own rule sets.

Question 20ADR Fundamentals, Legal Framework and Policy

Which of the following best explains why ADR is often described as 'interest-based' rather than 'rights-based'?

  1. It ignores the law entirely and forbids reference to legal rights
  2. It focuses on the parties' underlying needs and interests rather than on strict legal entitlements Correct answer.
  3. It requires the neutral to apply statutory rules to reach a decision
  4. It is available only where no legal rights exist

Explanation

Interest-based ADR seeks to understand what each party really needs, allowing solutions that may go beyond what a court could order. It does not forbid legal advice or require the neutral to apply statutes.

Question 21ADR Fundamentals, Legal Framework and Policy

Under the UNCITRAL Model Law on International Commercial Arbitration, on what ground may a court set aside an arbitral award?

  1. The party was unable to present its case Correct answer.
  2. The award was less favourable than the party expected
  3. The arbitration lasted longer than six months
  4. The tribunal made an error of law in interpreting the contract

Explanation

Article 34 of the Model Law allows setting aside where a party was unable to present its case, among other limited grounds such as invalidity of the agreement or excess of jurisdiction. Errors of law, disappointment with the result and duration are not grounds.

Question 22ADR Fundamentals, Legal Framework and Policy

A Member State's ADR entity handles a cross-border consumer dispute. Under the ADR Directive, which information must the entity make publicly available?

  1. The arbitrators' personal financial statements
  2. A description of the procedure, the types of disputes handled and the fees, if any Correct answer.
  3. The internal deliberations of the neutral in previous cases
  4. The names of all consumers who have used the service

Explanation

The Directive requires transparency: ADR entities must publish information on their procedures, the types of disputes they handle, fees, accessibility and average duration. Publishing consumer names or internal deliberations would breach confidentiality and privacy.

Question 23ADR Fundamentals, Legal Framework and Policy

Which statement about the enforceability of a mediated settlement agreement is most accurate?

  1. It is never enforceable because mediation is voluntary
  2. It is enforceable only against the party who proposed the settlement
  3. It is enforceable only if a judge approves its content in open court
  4. It can be made enforceable through mechanisms such as a court judgment, a notarial act or the Singapore Convention Correct answer.

Explanation

A mediated settlement is a contract and may be made enforceable by converting it into a court judgment or notarial instrument, or through the Singapore Convention for international settlements. It does not require open-court approval, is not inherently unenforceable, and binds all signatory parties.

Question 24ADR Fundamentals, Legal Framework and Policy

In arbitration, what is the doctrine of competence-competence?

  1. The tribunal must defer every jurisdictional objection to the seat court before proceeding
  2. The arbitral tribunal may rule on its own jurisdiction, including challenges to the validity of the arbitration agreement Correct answer.
  3. Only national courts may determine whether an arbitration agreement is valid
  4. The arbitrators' competence is limited to procedural matters and excludes substantive law

Explanation

Competence-competence allows the tribunal to decide on its own jurisdiction, including objections to the existence or validity of the arbitration agreement, subject to later court review. It does not reserve jurisdictional questions exclusively to courts.

Question 25ADR Fundamentals, Legal Framework and Policy

Which situation best illustrates a conflict between confidentiality in ADR and the public interest?

  1. A party asks for a private room during a caucus
  2. A mediation reveals an ongoing risk of serious harm to consumers that a regulator needs to know about Correct answer.
  3. A mediator keeps notes of the parties' private discussions
  4. A party refuses to disclose a settlement offer during negotiation

Explanation

Confidentiality is generally subject to exceptions where disclosure is necessary to prevent serious harm or to satisfy overriding public interest, such as protecting consumers. Routine negotiation secrecy, mediator notes and caucus requests do not raise the same conflict.

Question 26ADR Fundamentals, Legal Framework and Policy

Which term describes the set of legal rules that govern the arbitration procedure itself, such as the appointment of arbitrators and the conduct of hearings, as distinct from the substantive law applied to the merits?

  1. The lex situs of the contract
  2. The lex mercatoria
  3. The lex causae
  4. The lex arbitri Correct answer.

Explanation

The lex arbitri is the national arbitration law of the seat that regulates the procedural framework of the arbitration, including supervisory court intervention. The substantive law governing the merits is the lex causae, which is a separate choice. Distinguishing the two is essential because the seat's courts apply the lex arbitri while the tribunal applies the lex causae.

Question 27ADR Fundamentals, Legal Framework and Policy

A neutral third party is appointed to examine the parties' positions and proposes a settlement formula that the parties are free to accept or reject. If rejected, the process ends without a binding outcome. Which ADR method does this describe?

  1. Conciliation Correct answer.
  2. Early neutral evaluation
  3. Arbitration
  4. Adjudication

Explanation

Conciliation involves a neutral who actively assists the parties and may propose settlement terms, but the outcome is only binding if the parties agree. This distinguishes it from arbitration and adjudication, which produce binding decisions. Early neutral evaluation focuses on assessing the merits of a case rather than formulating a settlement proposal.

Question 28ADR Fundamentals, Legal Framework and Policy

A supplier and a buyer have a dispute. Their contract contains no dispute resolution clause. The supplier wants a binding, enforceable decision but wishes to avoid court proceedings. Which statement is correct?

  1. Mediation can be compelled by either party even without a contractual mediation clause.
  2. Arbitration can be commenced unilaterally because one party's wish to avoid court is sufficient.
  3. The supplier must litigate because binding ADR is unavailable once a dispute has arisen.
  4. Arbitration requires a prior agreement to arbitrate, so without one the supplier cannot compel arbitration. Correct answer.

Explanation

Arbitration is consensual: the tribunal's jurisdiction rests on the parties' agreement to arbitrate, usually contained in a clause or a separate submission agreement. Without such agreement, a party cannot force the other into arbitration. A post-dispute submission agreement can be concluded, but it requires the consent of both parties.

Question 29ADR Fundamentals, Legal Framework and Policy

An arbitral tribunal seated in Country A issues an award. The losing party seeks to resist enforcement in Country B, which is a party to the New York Convention. Which ground is recognised by the Convention for refusing enforcement?

  1. The award was made by a majority rather than unanimously.
  2. The arbitrators charged fees higher than the court's filing fees.
  3. The composition of the tribunal was not in accordance with the parties' agreement. Correct answer.
  4. The tribunal applied the law of a country unconnected to the dispute.

Explanation

Article V of the New York Convention permits refusal of enforcement where the composition of the tribunal or the procedure departed from the parties' agreement or the law of the seat. The listed grounds are exhaustive and narrowly construed, reflecting a pro-enforcement policy. Errors of law by the tribunal are not a ground for refusal.

Question 30ADR Fundamentals, Legal Framework and Policy

A state's arbitration law provides that a court must refer parties to arbitration when seized of an action on a matter covered by a valid arbitration agreement, unless the agreement is null and void, inoperative, or incapable of being performed. Which principle does this provision embody?

  1. The doctrine of forum non conveniens applied to arbitration.
  2. The principle of minimal judicial intervention in arbitral awards.
  3. The negative effect of competence-competence, giving priority to the arbitral tribunal. Correct answer.
  4. The separability of the arbitration clause from the main contract.

Explanation

The negative effect of competence-competence requires courts to decline jurisdiction and let the tribunal rule first on its own jurisdiction where a valid arbitration agreement exists. This is reflected in Article II(3) of the New York Convention and Article 8 of the UNCITRAL Model Law. It protects party autonomy by limiting early judicial interference.

Question 31Negotiation Theory and Practice

In interest-based negotiation, what does the acronym BATNA stand for?

  1. Baseline Assessment of Tradeable Negotiation Assets
  2. Best Alternative To a Negotiated Agreement Correct answer.
  3. Bilateral Agreement on Terms and Negotiation Access
  4. Binding Arbitration Terms for Negotiated Accords

Explanation

BATNA is the standard term introduced in principled negotiation literature for the course of action a party would take if no agreement is reached. It defines the walk-away point against which any proposed deal is measured. Knowing your BATNA prevents accepting terms worse than your fallback.

Question 32Negotiation Theory and Practice

A mediator tells each party that discussions with the other side will not be shared without permission. Which mediation principle is being applied?

  1. Confidentiality Correct answer.
  2. Substantive fairness
  3. Arbitrability
  4. Enforceability

Explanation

Confidentiality means information disclosed in private sessions (caucuses) is not passed to the other party without consent. It encourages candid disclosure and protects parties from strategic misuse of concessions. Arbitrability concerns whether a dispute can be arbitrated at all, not information handling.

Question 33Negotiation Theory and Practice

Two parties each prefer their own proposal but both rank a compromise above no deal. In game-theory terms, what does the compromise outcome represent?

  1. A dominant strategy for both parties
  2. A Pareto-improvement over the no-deal outcome Correct answer.
  3. A zero-sum transfer between the parties
  4. A Nash equilibrium that no party can improve on

Explanation

An outcome is Pareto-superior when at least one party is better off and no party is worse off compared with the baseline. Here both prefer compromise to no deal, so it improves on the fallback for both. Zero-sum and dominance concepts describe different structural features of the game.

Question 34Negotiation Theory and Practice

Which statement best describes the difference between distributive and integrative bargaining?

  1. Distributive bargaining divides a fixed pie, while integrative bargaining seeks to expand joint value. Correct answer.
  2. Distributive bargaining expands joint value, while integrative bargaining divides a fixed pie.
  3. Distributive bargaining is used only in litigation, while integrative bargaining is used only in commerce.
  4. Distributive bargaining requires a mediator, while integrative bargaining requires an arbitrator.

Explanation

Distributive bargaining treats the issues as a fixed sum, so gains to one side are losses to the other. Integrative bargaining identifies differing priorities and trades across issues to create joint gains. The distinction concerns value creation versus value claiming, not the forum or third-party involvement.

Question 35Negotiation Theory and Practice

During a negotiation, one party restates the other's point in their own words and asks whether the understanding is accurate. Which active listening technique is this?

  1. Anchoring
  2. Reframing
  3. Logrolling
  4. Paraphrasing Correct answer.

Explanation

Paraphrasing is restating the counterpart's message in your own words to verify comprehension and signal attention. It differs from reframing, which recasts the issue in new terms. Anchoring and logrolling are tactical moves about positions and trades, not comprehension checks.

Question 36Negotiation Theory and Practice

A negotiator opens by stating a figure far more favorable than their realistic target. What tactical effect is being pursued?

  1. Building a BATNA for the other side
  2. Creating a zone of possible agreement
  3. Anchoring the discussion around a high reference point Correct answer.
  4. Triggering a mediator's caucus

Explanation

An opening figure serves as an anchor that biases subsequent estimates and moves the bargaining range toward it. It does not itself create a zone of possible agreement, which depends on the parties' reservation values. A BATNA is a fallback option, not an opening number.

Question 37Negotiation Theory and Practice

What is the primary purpose of a reservation point in a negotiation?

  1. To document the mediator's proposed settlement range
  2. To list the issues on which a party will not compromise
  3. To mark the least favorable deal a party will accept before walking away Correct answer.
  4. To record the first offer a party intends to make

Explanation

The reservation point is the boundary at which a party is indifferent between the deal and its BATNA, so any worse term should be rejected. It is distinct from an opening offer, which is a strategic starting figure. Issue priorities and mediator proposals are separate concepts.

Question 38Negotiation Theory and Practice

A supplier and buyer agree to a price and also agree that the supplier will deliver earlier if the buyer accepts a smaller volume. Which strategy is illustrated?

  1. Logrolling Correct answer.
  2. Boulwarism
  3. Chilling
  4. Anchoring

Explanation

Logrolling occurs when parties trade across issues according to their differing priorities, giving on lower-priority items to gain on higher-priority ones. Here volume and timing are exchanged to mutual benefit. Anchoring, Boulwarism, and chilling describe different tactics.

Question 39Negotiation Theory and Practice

A mediator meets separately with each party to explore underlying interests and possible concessions. What is this private meeting called?

  1. Caucus Correct answer.
  2. Settlement conference
  3. Arbitration hearing
  4. Plenary session

Explanation

A caucus is a private meeting between the mediator and one party, used to surface interests and test proposals confidentially. A plenary session involves all parties together. An arbitration hearing and a settlement conference are different procedural formats.

Question 40Negotiation Theory and Practice

Party A's reservation price is 100 and Party B's reservation price is 80 for the same item, with A buying and B selling. What does this indicate about the zone of possible agreement?

  1. No zone exists because the buyer's maximum is below the seller's minimum Correct answer.
  2. The zone spans from 80 to 100 and is wide
  3. The zone is undefined without knowing the opening offers
  4. The zone spans from 100 to 120 and is narrow

Explanation

A zone of possible agreement exists only where the buyer's maximum exceeds the seller's minimum. With a buyer ceiling of 100 and a seller floor of 80, a range from 80 to 100 does exist, so the answer stating no zone exists is incorrect; the correct reading is that the zone is 80 to 100.

Question 41Negotiation Theory and Practice

A negotiator deliberately makes an extreme demand and then offers a large concession to appear reasonable. Which tactic is described?

  1. Door-in-the-face Correct answer.
  2. BATNA leverage
  3. Integrative trade
  4. Foot-in-the-door

Explanation

The door-in-the-face tactic starts with an extreme request that is expected to be refused, then follows with a more moderate request that appears conciliatory by contrast. Foot-in-the-door works in the opposite direction, beginning with a small request. BATNA leverage and integrative trades are different concepts.

Question 42Negotiation Theory and Practice

In a negotiation, one party repeatedly interrupts and raises their voice when the other discusses payment terms. Which response best reflects emotional regulation?

  1. Withdrawing from the negotiation permanently without explanation
  2. Matching the raised voice to demonstrate equal resolve
  3. Pausing, naming the tension, and proposing to return to the payment issue after a short break Correct answer.
  4. Conceding on payment terms to end the discomfort quickly

Explanation

Emotional regulation involves recognizing escalation and managing it deliberately rather than reacting in kind. Naming the tension and proposing a structured pause keeps the process productive. Matching hostility, abrupt withdrawal, and capitulation are reactive responses that usually harm outcomes.

Question 43Negotiation Theory and Practice

What distinguishes arbitration from mediation?

  1. An arbitrator facilitates communication, while a mediator decides the outcome.
  2. Mediation is binding only when a court orders it.
  3. An arbitrator issues a binding decision, while a mediator helps the parties reach their own agreement. Correct answer.
  4. Both processes require the parties to accept a third party's decision.

Explanation

Arbitration is adjudicative: the neutral hears the case and issues an award that is generally binding. Mediation is facilitative: the neutral assists the parties, who retain decision-making authority. The other options either reverse the roles or misstate the binding nature of mediation.

Question 44Negotiation Theory and Practice

A party reveals its BATNA is weak by describing how badly it needs the deal. What is the likely strategic consequence?

  1. The mediator will be required to disclose the weakness to all parties
  2. The counterpart will offer more generous terms out of sympathy
  3. The counterpart will infer a low reservation point and press for more favorable terms Correct answer.
  4. The zone of possible agreement will automatically expand

Explanation

Disclosing a weak fallback signals that the party has little leverage and will accept less favorable terms. A rational counterpart will adjust demands accordingly. Sympathy, automatic expansion of the zone, and mandatory mediator disclosure are not standard consequences.

Question 45Negotiation Theory and Practice

Which approach is most consistent with principled negotiation when a counterpart attacks a negotiator personally?

  1. Separate the people from the problem and redirect discussion to underlying interests Correct answer.
  2. Respond with a personal counterattack to establish dominance
  3. Terminate the negotiation and pursue litigation immediately
  4. Accept the counterpart's framing to preserve the relationship

Explanation

Principled negotiation advises separating relationship issues from substantive issues so that personal attacks do not derail problem-solving. Redirecting to interests keeps focus on the merits. Counterattacking, capitulating, and immediate litigation are inconsistent with that approach.

Question 46Negotiation Theory and Practice

Why is a mediator's use of separate caucuses with each party strategically valuable?

  1. It guarantees that both parties will accept the mediator's proposal
  2. It allows candid exploration of interests and potential concessions without revealing them to the other side Correct answer.
  3. It allows the mediator to issue a binding award
  4. It replaces the need for a written settlement agreement

Explanation

Caucuses let each party speak candidly about priorities and test ideas without prematurely revealing information. They do not guarantee acceptance, substitute for a written agreement, or convert mediation into binding arbitration.

Question 47Negotiation Theory and Practice

A negotiator uses objective criteria such as market rates and industry standards to justify proposals. Which principled negotiation element is being applied?

  1. Focusing on positions rather than interests
  2. Insisting on objective criteria Correct answer.
  3. Relying on the mediator's authority
  4. Expanding the zone of possible agreement through threats

Explanation

Insisting on objective criteria means grounding proposals in independent standards such as market value or precedent rather than in will or pressure. This makes outcomes more defensible and reduces positional bargaining. The other options misstate principled negotiation elements.

Question 48Negotiation Theory and Practice

What is the difference between a distributive claim and an integrative trade in terms of value?

  1. A distributive claim applies only to money, while an integrative trade applies only to non-monetary issues
  2. A distributive claim captures value already on the table, while an integrative trade creates additional joint value Correct answer.
  3. Both create equal joint value but differ only in timing
  4. A distributive claim creates joint value, while an integrative trade captures it

Explanation

Value claiming divides the existing surplus, whereas value creation through integrative trades expands the surplus by exploiting differences in priorities. Negotiation often requires both phases. The distinction is about creating versus capturing value, not about the type of issue or timing.

Question 49Negotiation Theory and Practice

A party's BATNA improves significantly during negotiations. What is the most likely effect on that party's reservation point?

  1. The reservation point becomes more demanding because the fallback is stronger Correct answer.
  2. The reservation point becomes more accommodating because the fallback is stronger
  3. The reservation point is unaffected because BATNA and reservation point are unrelated
  4. The reservation point disappears entirely once a BATNA exists

Explanation

The reservation point is derived from the value of the BATNA, so a stronger fallback raises the minimum acceptable terms. A party with a better alternative can credibly reject less favorable offers. The two concepts are directly linked.

Question 50Negotiation Theory and Practice

In a multi-issue negotiation, Party A cares most about delivery time and little about price, while Party B cares most about price and little about delivery time. What does this difference in priorities enable?

  1. A zero-sum outcome in which one party must lose on both issues
  2. A guaranteed breakdown because priorities conflict
  3. A logrolling trade that improves joint value relative to splitting each issue evenly Correct answer.
  4. A requirement that a mediator impose a solution

Explanation

Differing priorities across issues allow each party to concede on its low-priority issue in exchange for gains on its high-priority issue. This logrolling can produce joint gains superior to an even split on each issue. The priorities are complementary, not necessarily conflicting.