ORGS 4560 Lecture Notes - Lecture 10: Fiduciary
ORGS 4560
Lecture 10
Misrepresentation
- Negotiator to make a positive misstatement before a statement is
judged fraudulent, basic legal rule for commercial negotiators is “be
silent and be safe”
- In face of inconvenient questions, negotiators often forced to resort to
verbal feints and dodges (Pg 5)
- When you choose to lie in response to a pointed question probing the
strength of bargaining position, immediately raise a risk of legal
liability
- Some lies are not “material” and the other party may be charged with
a duty to discount the truth of what you tell them
- Circumstances when it may be fraudulent to keep peace about an
issue even if the other side does not ask about it, American law
imposes affirmative disclosure duties in the following four
circumstances:
1. When the negotiator makes a partial disclosure that is or
becomes misleading in light of all the facts; company is profitable,
may be under a duty to disclose whether you used questionable
accounting techniques to arrive at that statement, should also
update prior statement if you show a loss in the next quarter and
negotiations are still ongoing
2. When the parties stand in a fiduciary relationship to each other;
in negotiations trustees and beneficiaries, partners in a
partnership, shareholders in a small corporation, or members of a
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Document Summary
Negotiator to make a positive misstatement before a statement is judged fraudulent, basic legal rule for commercial negotiators is be silent and be safe . In face of inconvenient questions, negotiators often forced to resort to verbal feints and dodges (pg 5) When you choose to lie in response to a pointed question probing the strength of bargaining position, immediately raise a risk of legal liability. Some lies are not material and the other party may be charged with a duty to discount the truth of what you tell them. Circumstances when it may be fraudulent to keep peace about an issue even if the other side does not ask about it, american law imposes affirmative disclosure duties in the following four circumstances: None of these four exceptions applies, neither side is likely to be found liable for fraud based on a non-disclosure.