Flashcards in Ch 5 Arbitration Deck (53)
What are three ways to resolve disputes rather than litigation?
Negotiation, arbitration, mediation
______ leads to _______ when one party makes a claim that the other denies.
What is negotiation?
Process used to persuade or coerce someone to do what a person wants them to do
occurs when there are two or more points of view, leads to disputes Not bad or negative
Arises when one part makes a claim that another party denies
Negotiations seek to have a ____________ ______________ outcome.
Positional Negotiation - Positional Bargaining?
used instinctively by people Ex. Sales price, between the seller and buyer (meet in middle)
Principled, Interest-Based Negotiation
Provides 7 elements that REMOVE certain BARRIERS created by positional negotiation. Referred as interest-based negotiation (ex. Communication, Relationship, Interests, Options, Legitimacy, Alternatives, Commitment)
Alternative Dispute Resolution Systems (ADR)
ADR systems help ENSURE THE PRODUCTIVE RELATIONSHIPS needed for successful business transactions.
Differing methods of resolving disputes exist along a continuum with a negotiated settlement being the least expensive (and probably more effective)
Scale of Dispute Resolution Systems (5)
Trial and Appeal (most expensive in time, cost, and emotions)
> Focus Groups
> Negotiated Settlement (least expensive in time, cost, and emotions)
Opinions of others are a motivating force in encouraging amicable settlements.
Juries are sympathetic to individuals who have suits against large corporations.
Focus groups provides attorneys insight into possible JURY REACTION to the evidence and points OUR WEAKNESSES in the case.
-these parties often settle their dispute without having to go through the formal process of either a trial or an arbitration.
ADR system in which the disputing parties agree to have a THIRD PARTY DECIDE THE MERITS OF THE DISPUTE.
-private, with not public record.
who is the Arbitrator?
Authorized to make decisions that are binding on the parties
-considered an expert in their field.
Benefits of Arbitration
Helps avoid litigation expenses and courtroom formalities,
Ease congested court dockets,
Relatively quick and inexpensive resolution of disputes
What is a submission?
Act of referring a matter to arbitration
What is voluntary arbitration?
Submission to arbitration by the parties
What is mandatory arbitration?
Occurs when a statue or court requires parties to arbitrate
What is an award?
Decision made by the arbitrator
-Not subject to judicial review
-Award is valid as long as it settles the entire controversy and states which party is to pay the other a sum of money
-Final on all issues submitted and enforceable by the courts
Submission - What are the issues?
occurs when the parties enter into an agreement to arbitrate an existing dispute
-May be a question of fact or law.
Submission - Parties can???
Parties can contractually agree to submit to arbitration all issues that arise in the future
Factors that influence the selection Process of Arbitrators - Expertise?
Use of an expert to resolve disputes MAKES ARBITRATION PREFERABLE to litigation
Factors that influence the selection Process of Arbitrators - Number Chosen?
Number of arbitrators is based on the agreement of the parties, but sometimes 3 are chosen.
Factors that influence the selection Process of Arbitrators - Authority over certain matters?
Arbitrators' authority is a topic of controversy and litigation
expert in their field
Federal Arbitration Act (FAA) encourages
Encourages disputing businesses to utilize arbitration
Federal Arbitration Act (FAA) -how valid is this?
FAA provides that arbitration agreements shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
Federal Arbitration Act (FAA) - Impact on Policy
FAA covers any arbitration clause in a contract that involves interstate commerce
-Courts should enforce arbitration agreements
-Federal policy favors arbitration of commercial disputes
-U.S. Supreme Court strongly supports the use of arbitration
Federal Arbitration Act (FAA) - Impact on State Law
Some state laws specify that designated matters are not to be submitted to arbitration
-Commerce Clause and Supremacy Clause of the U.S. Constitution invalidate state laws that deny arbitration of certain disputes
FAA - Grounds on which arbitration can be vacated
a) Award was procured by corruption, fraud, or other undue means.
b) Arbitrators: Were partial or corrupt.
c) Were guilty of misconduct.
d) Exceeded or imperfectly executed their powers