Identify Terms That Advance Negotiation - Next Generation Bar Exam
- What is the effect of anchoring in negotiation?
- An initial offer influences the other party's perception of a reasonable outcome. Ambitious but credible first offers tend to shift results toward the offeror.
- What is the zone of possible agreement?
- The range between the parties' reservation points in which a deal is possible. If reservation points do not overlap, no agreement is possible on that issue alone.
- Two business partners disagree about the future profits of a product line one is buying from the other. What term may bridge the gap?
- An earn-out payment tied to actual future profits. Contingent payments let each party bet on its own prediction.
- What is interest-based negotiation?
- Negotiation focused on the parties' underlying needs rather than their stated positions. It often produces options that satisfy both sides.
- What settlement term addresses a defendant's concern about admitting fault?
- A no-admission-of-liability clause. The defendant pays without conceding wrongdoing.
- What settlement term addresses a defendant's inability to pay a lump sum?
- A structured payment schedule. Installment payments can make a settlement feasible.
- A former employee suing for wrongful termination cares most about future employment prospects. What settlement term may advance negotiation?
- A neutral reference provision. It addresses the employee's interest at little cost to the employer.
- What is a contingent agreement term?
- A term whose effect depends on a future event, such as an earn-out tied to performance. Contingent terms bridge disagreements about future outcomes.
- Under MRPC 4.1, what may a lawyer not do during negotiation?
- Knowingly make a false statement of material fact or law to a third person. Estimates of price or value and a party's intentions about settlement are ordinarily not statements of material fact.
- What settlement term protects a defendant from future claims arising from the same events?
- A general release. The plaintiff gives up claims arising from the released events.
- What is a BATNA?
- A party's best alternative to a negotiated agreement. Knowing the BATNA tells a party when to walk away.
- What is a reservation point in negotiation?
- The least favorable terms a party will accept. It is often set by reference to the party's BATNA.
- What settlement term addresses a defendant's concern about reputational harm?
- A confidentiality or non-disparagement provision. Such terms can provide value to a defendant at little cost to the plaintiff.