Ethical Boundaries & Good Faith Flashcards

A negotiator discovers mid-negotiation that a key assumption underlying the deal is false. What does good faith require?

Answer: Disclose the error to the other party promptly

Good faith requires honest dealing, which includes correcting material errors that could affect the other party's decision-making.

Which behavior constitutes 'sharp practice' in negotiation ethics?

Answer: Exploiting a technical loophole to gain advantage unfairly

Sharp practice involves exploiting technicalities or procedural tricks in ways that violate the spirit of fair dealing, even if technically legal.

When a negotiator says 'I need to check with my principal' as a tactic rather than a genuine need, this raises concerns about:

Answer: Deceptive authority misrepresentation

Falsely claiming limited authority to create negotiating room is a deceptive tactic that undermines good faith.

The ethical concept of 'duty to speak' in negotiation refers to:

Answer: The requirement to volunteer material information the other party would reasonably expect

Duty to speak arises when silence would be misleading — negotiators must disclose information that a reasonable party would expect to receive.

A supplier negotiating a long-term contract knows their manufacturing facility will close in 6 months. Ethically, they should:

Answer: Disclose this fact as it is material to the contract duration

A facility closure is material information that directly affects the supplier's ability to perform, creating an ethical obligation to disclose.

Which of the following best describes the difference between puffery and fraudulent misrepresentation in negotiation?

Answer: Puffery is vague promotional opinion; fraud involves knowingly false statements of fact

Puffery ('best product on the market') is non-actionable opinion, while fraud involves knowingly stating false facts that induce reliance.

In ethical negotiation, 'reciprocity' as a principle means:

Answer: Treating the other party as you would want to be treated in return

Reciprocity as an ethical norm means applying consistent standards of fairness and treating others as you'd expect to be treated.