Chapter 5 Business Law

Ahmed and Jerry enter into a business agreement to assemble and sell prepackaged salads. In their written agreement, both agree that they will be required to settle all disputes through arbitration. Which of the following statements is true of this situation? A. This case is an example of a mandatory arbitration clause. B. This case is an example of a voluntary arbitration clause. C. This case is an example of a caucus arbitration agreement. D. This case is an example of a court-annexed arbitration clause. E. This case is an example of a postdispute arbitration agreement.

B

In the context of alternative dispute resolution, mediators __________. A. can impose a binding solution on all disputing parties B. typically use the principles of interest-based negotiations C. must meet the licensing requirements for their decisions to be used in court if a dispute proceeds to litigation D. typically help parties prepare for litigation E. act as a necessary precursor to arbitration

B

. Unlike mandatory arbitration, voluntary arbitration is __________. A. based on parties' agreement after dispute arises or on contract clause before dispute arises B. unconstitutional in most states C. coercive because it provides an unfair advantage to the party creating the contract D. time consuming and expensive when compared to litigation E. impractical because agreements are too difficult to reach in early contract negotiations

A

According to subsection (c) of the Federal Arbitration Act, which of the following actions constitutes misconduct on the part of an arbitrator that justifies vacating an arbitration award? A. Accepting gifts from a party during the proceedings B. Misunderstanding the law C. Conducting a caucus with a party to the proceedings even if the other party consents to it D. Making erroneous rulings during a hearing E. Reaching erroneous findings of fact from an evidence

A

When arbitration is pursuant to state statute, _____. A. the statute determines what grounds may be used to challenge an award in court B. the statute of the state where the dispute is first submitted prevails in the case of a dispute involving interstate commerce C. a disputing party may choose to have provisions of the Federal Arbitration Act govern any resolution of the dispute if the state statute appears unfavorable to his or her position D. only Congress can overturn it E. only the U.S. Supreme Court can overturn it

A

Which of the following is one of the primary reasons for the increase in the number of mediations? A. The disputing parties in the mediation process retain control over when to settle. B. Outcomes of mediations are legally binding. C. The mediators in the mediation process are selected by the Supreme Court. D. Lawyers play a more active role in the mediation process when compared to arbitration. E. The mediation process involves a mediator and only one of the disputing parties

A

Which of the following statements is true of caucuses in dispute resolution? A. They are sometimes used by mediators to make the mediation processes more productive. B. They only occur when mandated by a court order. C. They involve negotiations between the disputing parties without a mediator and in the presence of their attorneys. D. They are illegal because they are considered ex parte communications. E. They are synonymous with de novo reviews.

A

. Which of the following statements is true of an award? A. It is not subject to judicial review on the merits of a decision. B. It becomes final and enforceable as soon as it is made by an arbitrator. C. It needs to set forth findings of fact, conclusions of law, or the reasons for the award. D. It is the final set of findings presented by a focus group to an arbitrator. E. It is mostly delivered orally by an arbitrator to the disputing parties and need not be in writing in most states.

A.

. Which of the following statements is true of the Federal Arbitration Act? A. It covers any arbitration clause in a contract that involves interstate commerce. B. It allows state laws to prevent arbitration of disputes even if the disputing parties are engaged in or affect interstate commerce. C. It strictly nullifies the right of the Equal Employment Opportunity Commission to litigate if an employee signed an arbitration clause. D. It ensures that arbitration is used only in federal cases and not in state cases. E. It guarantees that all arbitration clauses are irrevocable under any circumstances.

A.

48. _____, one of the seven elements of principled, interest-based negotiations, involve the negotiating parties brainstorming possible solutions to their dispute. A. Options B. Interests C. Relationships D. Positions E. Commitments

A.

A negotiation between a seller and a buyer begins with each party stating their respective expectations in a competitive style. The seller starts with as high an asking price as is considered reasonable. Likewise, the buyer begins with the lowest reasonable price. In the context of negotiation methods, this scenario is an example of _____. A. positional bargaining B. principled negotiation C. distributive negotiation D. fact bargaining E. surface bargaining

A.

According to Roger Fisher, William Ury, and Bruce Patton, any successful negotiation must conclude with the disputing parties making realistic _____. A. commitments B. aberrations C. deviations D. communications E. assumptions

A.

In the context of alternative dispute resolution systems, the act of referring a matter to arbitration is called _____. A. submission B. informal review C. concession D. de novo review E. conciliation

A.

In the context of judicial review of mandatory arbitration, de novo review means that __________. A. the court appoints an arbitrator to initiate arbitration proceedings B. the court tries the issues anew as if no arbitration occurred C. the court recommends that the disputing parties opt for mediation instead of litigation D. the court halts a mediation process and begins litigation E. the court takes into account the arbitrator's award in the litigation

B

In the context of judicial review of voluntary arbitration, error of law renders an arbitration award void only when __________ A. both disputing parties are dissatisfied with it B. it violates a positive mandate of the law C. the arbitrator reaches erroneous findings of fact from an evidence D. it results in a huge financial loss for either of the disputing parties E. the arbitrator misunderstands the law

B

The final step to a successful mediation is __________. A. submitting any conclusions to a judge for judicial approval prior to implementation B. the writing and signing of the agreement by the disputing parties C. providing all evidence obtained during the mediation to the parties' attorneys for use in the next phase of litigation D. submitting the signed agreements to focus groups for approval E. turning the results over to an arbitrator as a submission for arbitration

B

When a losing party in an arbitration proceeding makes allegations of bias against an arbitrator, the allegations __________. A. automatically nullify a panel's opinion B. normally do not affect the results of arbitration C. result in a judge overturning the opinion D. normally remove that arbitrator's opinion from the results of the arbitration E. normally set off a new round of litigation

B

Milkmen Corp., a dairy product manufacturer, faces issues on various fronts like accounting discrepancies, use of preservatives, and retailer relations. Which of the following processes is Milkmen Corp. most likely to choose if it intends to settle the issues using a relatively quick and inexpensive resolution system? A. Trial B. Arbitration C. Judicial review D. Indictment E. Litigation

B.

The decision handed down by an arbitrator in a hearing is called a(n) _____. A. submission B. award C. verdict D. judgment E. summon

B.

Which of the following statements is true of arbitration? A. The record of proceedings is available to the press and others. B. The decisions arising from arbitration are binding on the disputing parties. C. The outcomes of an arbitration procedure cannot be imposed on the disputing parties. D. The disputing parties resolve all of the matters of contention by themselves in arbitration, without the intervention of a third party. E. The primary function of arbitration is to serve as a prelude to litigation.

B.

Which of the following statements is true of focus groups? A. They are employed by two disputing parties to decide on feasible solutions. B. They are used by attorneys, and they point out weaknesses in a particular case. C. They are a group of experts from the field of law who provide insights into a case. D. They are primarily employed to determine the facts of a particular case. E. They are precluded during the pretrial process when a particular case is subject to litigation

B.

Which of the following statements is true of principled, interest-based negotiations? A. They typically begin in a competitive style with the disputing parties stating their respective expectations. B. They involve seven elements that vary in importance depending on the factual situation in dispute and on the parties' individual perspectives. C. They are concerned only with preparing for litigation to settle disputes. D. They require the presence of a judge or magistrate to come up with a reasonable outcome that is better than the disputing parties' alternatives. E. They force parties to choose alternatives, which are outcomes that are agreeable to everyone involved.

B.

_____, one of the seven elements of principled, interest-based negotiations, are outcomes that are possible without the agreement of the other party in a negotiation. A. Commitments B. Alternatives C. Options D. Interests E. Relationships

B.

Courts throughout the United States have uniformly upheld mandatory arbitration statutory schemes as against the constitutional challenges where a dissatisfied party can __________. A. appeal against an award directly to the state Supreme Court B. appeal against an award directly to the U.S. Supreme Court C. reject an award and seek a review in the appropriate trial court D. sue the arbitrator involved in the procedure E. ignore the disputed award as it is not legally binding

C

Jim Corp. and Bartle Inc., two parties involved in a spice trade contract, enter into a dispute because of conflicting interests. They are unable to agree to arbitrate and opt for settlement through litigation. This scenario indicates that to settle disputes, Jim Corp. and Bartle Inc. are most likely to have included __________. A. the Supremacy Clause in their business contract B. an involuntary arbitration clause in their business contract C. a postdispute arbitration agreement in their business contract D. a predispute arbitration clause in their business contract E. the Commerce Clause in their business contrac

C

Judicial review of the awards of voluntary arbitration can correct __________. A. the outcome when both the disputing parties are dissatisfied with it B. the erroneous rulings made by an arbitrator during the hearing C. fraudulent or arbitrary actions by an arbitrator D. erroneous findings of facts from the evidence by an arbitrator E. the outcome even if one of the disputing parties is dissatisfied with it

C

The _____ of the U.S. Constitution are often used to set aside state laws that deny arbitration of a certain dispute. A. Takings Clause and the Establishment Clause B. Bill of Rights and the Twelfth Amendment C. Commerce Clause and the Supremacy Clause D. Third and the Fourth Amendments E. Due Process Clause and the Takings Clause

C

Unlike an arbitrator, a mediator __________. A. is not a neutral party B. can only be appointed by the Supreme Court C. cannot impose a binding solution on the disputing parties D. can impose a binding solution only on any one of the disputing parties E. cannot be chosen by the disputing parties

C

Which of the following statements is true of arbitration procedures? A. All types of arbitration procedures are voluntary and cannot be forced on the disputing parties. B. Mandatory arbitration is a more effective alternative to litigation than a voluntary arbitration. C. Generally, the award resulting from the voluntary arbitration procedure is final. D. If an arbitrator made erroneous rulings during a hearing, the award can be set aside. E. An arbitrator's award is binding on the parties only if there was no error of law on the part of the arbitrator.

C

_____ frame the issues to be resolved and define the scope of an arbitrator's powers. A. Municipal court judges B. District court judges C. The disputing parties D. Mediators E. Focus groups

C

_____ arise when parties already in dispute decide that arbitration is better than litigation. A. Postdispute mandatory arbitrations B. Involuntary arbitrations C. Injunctions D. Predispute contract-based clauses E. Postdispute arbitration agreements

E

. _____ is the process used to persuade or coerce someone to do what one wants them to do. A. Dissidence B. Subservience C. Negotiation D. Contention E. Knowledge transfer

C.

Arbitrators generally are chosen by _____. A. the Supreme Court B. litigators C. the disputing parties D. focus group E. mediators

C.

Which of the following statements is true of conflicts? A. They are always negative in nature. B. They are present only in unproductive relationships. C. They lead to disputes when coupled with claims that are rejected. D. They cease to exist when there are two or more points of view. E. They promote a secure environment if left undiscussed

C.

Mandatory arbitration can be constitutional if __________. A. the disputing parties include a contract clause for arbitration in the agreement before dispute arises B. licensed arbitrators preside over all proceedings C. all disputing parties agree in advance to be bound by the arbitration award D. fair procedures are provided by the legislature and ultimate judicial review is available E. it is bound by the Supremacy Clause and the Commerce Clause of the U.S. Constitution

D

When the disputing parties agree to resolve all matters of contention that they can and agree to arbitrate the unresolved matters, they are said to be using an alternative dispute resolution technique known as _____. A. judicial review B. judicial activism C. submission D. Med-Arb E. a caucus

D

A particular state decrees that the parties to a divorce case involving a property dispute take up arbitration. Which of the following types of arbitration is depicted in this case? A. Contract-based arbitration B. Discretionary arbitration C. Predispute arbitration D. Mandatory arbitration E. Precursor arbitration

D.

An arbitrator's award must __________. A. be desirable to both the disputing parties to be legally binding and enforceable B. set forth the findings of fact under any circumstance C. set forth the specific credentials of the arbitrator D. give a disclosure of findings and the reasons if an arbitration agreement so requires E. define the scope of the arbitrator's powers

D.

Jane is deprived of her alimony from Ben as he is reluctant to make a settlement. Which of the following statutes is most likely to be applicable in this case? A. Contract-based arbitration statute B. Temporary arbitration statute C. Postdispute arbitration statute D. Mandatory arbitration statute E. Predispute arbitration statute

D.

Which of the following statements is true of arbitrators? A. Arbitrators generally are chosen by the Supreme Court. B. Arbitrators' decisions are rarely binding on the disputing parties. C. Arbitrators must satisfy the licensing requirements of the American Arbitration Association. D. Arbitrators should be disinterested in the financial effect of a decision. E. Arbitrators are rarely approached by the disputing parties to resolve the parties' difference

D.

Which of the following statements is true of the use of alternative dispute resolution (ADR) techniques? A. ADR techniques are ineffective once the pretrial process has begun. B. Disputing parties must begin a lawsuit to use any form of ADR. C. Disputing parties cannot specify the preferred ADR technique to be used in the parties' contract. D. Disputing parties can agree to use an ADR technique after a dispute arises. E. Litigation precludes the use of ADR techniques for dispute resolution.

D.

_____ has been described as a better approach to negotiating among disputing parties in the book Getting to Yes by Roger Fisher, William Ury, and Bruce Patton. A. Positional, competition-based bargaining B. Fact-based bargaining C. Distributive negotiation D. Principled, interest-based negotiation E. Surface negotiation

D.

. _____ occurs when a trial judge requires the disputing parties to submit to the mediation process before a complaint can be litigated formally. A. Submission B. Party-directed mediation C. Evaluative mediation D. Med-Arb E. Court-annexed mediation

E

A _____ in mediation occurs when a mediator meets privately with one party without the other party. A. calumny B. consensus C. convention D. convocation E. caucus

E

Mediators are similar to arbitrators in they can impose binding decisions on the disputing parties B. they must be qualified and trained to practice dispute resolution methods C. their cases are always assigned by the Supreme Court D. they operate in federally important cases rather than local cases E. they must be disinterested third parties

E

Which of the following statements is true of mediation? A. Mediation uses mediators who tend to be more experienced in the field than arbitrators; their decisions are less likely to be erroneous. B. The disputing parties do not have control over the mediation process, reducing preparation time. C. Mediation is typically more expensive than litigation and arbitration. D. The outcome of a mediation process is legally binding on the disputing parties and is enforceable. E. A trial judge can require the disputing parties to submit to the mediation process before a complaint can be litigated formally.

E

Which of the following statements is true of voluntary arbitration? A. Submission is required by statute. B. The court will conduct a de novo hearing when reviewing the arbitration reward. C. The procedure is associated with a court's supervision, and discovery is usually done. D. The quality of the outcome is considerably affected when compared to mandatory arbitration. E. The procedure is not tied to a court and is not bound by rules of evidence.

E

According to Roger Fisher, William Ury, and Bruce Patton, _____ is an element of principled, interest-based negotiations that involves the application of accepted standards to the topic negotiated—rather than having the disputing parties state unsupported propositions. A. accommodation B. collaboration C. avoidance D. competition E. legitimacy

E.

In the absence of a statute, the rights and duties of the disputing parties to a submission for arbitration are described and limited by _____. A. the Constitution B. the legislature C. the litigator the arbitrator's decision E. the parties' agreement

E.

In the context of alternative dispute resolution systems, _____ deliberate and make findings that give attorneys insight into possible jury reaction to the evidence in a case. A. resolution groups B. barristers C. magistrates D. control groups E. focus groups

E.

The effect of the Federal Arbitration Act on state laws is that state laws __________. A. see arbitration as a necessary prelude to litigation B. always favor conciliation over arbitration C. never consider an arbitrator's award as legally binding and enforceable D. strictly nullify the right of the Equal Employment Opportunity Commission to litigate if an employee signed an arbitration clause E. cannot prevent arbitration of disputes if the disputing parties are engaged in interstate commerce

E.

_____ is the technique used in collective-bargaining contracts to settle grievances of employees against their employers. A. Facilitation B. Litigation C. Conciliation D. Mediation E. Arbitration

E.