Negotiating Teams from Two Small Companies Reach a Mutually Agreeable

question 51

Multiple Choice

Negotiating teams from two small companies reach a mutually agreeable compromise to settle a contractual dispute.The parties shake hands and part company with feelings of relief.What likely had the greatest motivating influence on the disputing parties to achieve a remedy through this form of dispute resolution?

• A) realizing cost savings for concerned parties
• B) assurance that insurance covered the risk
• C) justification of the use of the firm's resources
• D) hourly rate charged by expensive lawyers

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Definitions:

Manifestly Unreasonable

A term describing actions or decisions that are so unfair or absurd that they are immediately recognizable as unjust.

Consent Restraint

A security transfer restriction requiring a shareholder to obtain the consent of the corporation or its shareholders prior to the shareholder’s sale of her shares.

Option Agreement

A share transfer restriction granting a corporation or its shareholders an option to buy a selling shareholder’s shares at a price determined by the agreement.

Buy-and-Sell Agreement

a legally binding agreement between co-owners that outlines what will happen to an owner’s share of the business if they depart the business due to death or any other reason.