CNE Ethical Practices in Negotiation 2 — Questions and Answers
Question 1: A negotiator discovers mid-deal that their client's financial projections contain an error that overstates value. What is the ethical course of action?
- Disclose the error to the other party immediately
- Proceed without disclosing, since the other party should do their own due diligence
- Notify the client and correct the information before continuing (Correct answer)
- Withdraw from the negotiation entirely
Correct answer: Notify the client and correct the information before continuing
The CNE standard requires notifying the client and correcting material misrepresentations before they influence the other party's decisions.
Question 2: Which of the following best describes the concept of 'good faith' in negotiation ethics?
- Always accepting the other party's first offer
- Engaging sincerely with intent to reach a mutually acceptable agreement (Correct answer)
- Sharing all internal cost data with the other party
- Avoiding any competitive tactics throughout the negotiation
Correct answer: Engaging sincerely with intent to reach a mutually acceptable agreement
Good faith means genuine engagement toward resolution, not requiring disclosure of all information or abandonment of competitive strategy.
Question 3: A real estate negotiator uses a made-up competing offer to pressure the seller into accepting a lower price. This is best classified as:
- Acceptable puffery
- A legitimate anchoring tactic
- Fraudulent misrepresentation (Correct answer)
- Hard bargaining
Correct answer: Fraudulent misrepresentation
Fabricating a competing offer is fraudulent misrepresentation, crossing a clear ethical and legal line for CNE practitioners.
Question 4: When should a CNE negotiator disclose a conflict of interest to their client?
- Only if the conflict materially harms the client's final price
- After the deal closes, to avoid alarming the client unnecessarily
- As soon as the conflict is identified, before proceeding (Correct answer)
- Conflicts are common and do not need formal disclosure
Correct answer: As soon as the conflict is identified, before proceeding
Timely disclosure of conflicts of interest is required so clients can make informed decisions about whether to continue the relationship.
Question 5: The ethical principle of 'reciprocity' in negotiation most accurately refers to:
- Matching the other party's concessions in equal proportion
- Treating the other party the way you would want to be treated (Correct answer)
- Providing information only when the other side provides equal information
- Ensuring both parties end up with identical outcomes
Correct answer: Treating the other party the way you would want to be treated
Ethical reciprocity in the CNE framework reflects the Golden Rule—treating counterparts with the respect and fairness you expect in return.
Question 6: A negotiator is asked by their client to relay false information to the other party. The negotiator's best response is to:
- Comply, since agent duties to the client override third-party concerns
- Relay the information but add a personal disclaimer
- Refuse and explain that transmitting false information violates professional ethics (Correct answer)
- Ask the client to relay the information directly instead
Correct answer: Refuse and explain that transmitting false information violates professional ethics
CNE ethics prohibit agents from knowingly conveying false information on behalf of a client, regardless of client instruction.
Question 7: Which scenario most clearly illustrates an ethical use of strategic ambiguity in negotiation?
- Deliberately using vague contract language to create exploitable loopholes later
- Describing your flexibility on terms without revealing your exact walk-away point (Correct answer)
- Implying you have authority you do not actually possess
- Misrepresenting the timeline to create artificial urgency
Correct answer: Describing your flexibility on terms without revealing your exact walk-away point
Ethically, negotiators may withhold their precise reservation price while being truthful about flexibility—this is standard strategic information management.
CNE Ethical Practices in Negotiation 2
A negotiator discovers mid-deal that their client's financial projections contain an error that overstates value.
What is the ethical course of action?