Business Law in Canada, 11e (Yates)
Chapter 3 The Resolution of Disputes: The Courts and Alternatives to Litigation
1) Taisa is a massage therapist who runs a successful business from her home. One of her long-
time clients, Greg, owes her a considerable sum of money relating to unpaid massage therapy
sessions. Greg is reluctant to pay because he is unhappy with the services he has received. Which
of the following is true?
A) If her primary concern is to preserve her relationship with Greg, Taisa should consider an
alternative form of dispute resolution.
B) If her primary concern is to keep costs low, Taisa should commence a civil action against
Greg as soon as possible.
C) If her primary concern is to ensure the dispute is kept private, Taisa should commence a civil
action against Greg.
D) If her primary concern is the ability to appeal the decision made, Taisa should consider an
alternative form of dispute resolution.
E) Taisa needs to commence a civil action, as alternative forms of dispute resolution are not
available in commercial disputes.
Answer: A
Diff: 2 Type: MC Page Ref: 62
Topic: Ch. 3 - Alternatives to Court Action
Skill: Applied
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
2) Which of the following cases would be a good one to mediate?
A) A case where the parties want to ensure the right to appeal
B) A case where the parties want a high degree of public visibility
C) A case where the parties want to maintain goodwill
D) A case where the parties are not concerned about costs and delays
E) A case where the parties do not trust each other
Answer: C
Diff: 2 Type: MC Page Ref: 65
Topic: Ch. 3 - Mediation
Skill: Applied
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
,3) Which of the following is an advantage of using ADR?
A) Lengthy process
B) Sets a binding precedent
C) More expensive than litigation
D) Ensures full disclosure
E) Speedy resolution
Answer: E
Diff: 2 Type: MC Page Ref: 63
Topic: Ch. 3 - Advantages of ADR Versus Litigation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
4) Which of the following statements is correct?
A) The parties to a dispute lose control in negotiations.
B) Privacy is maintained in a court adjudication.
C) There is a great deal of flexibility in negotiation/mediation.
D) Goodwill is most likely maintained in litigation.
E) ADR agreements are enforceable or appealable.
Answer: C
Diff: 2 Type: MC Page Ref: 65
Topic: Ch. 3 - Mediation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
5) Which of the following is an advantage of the mediation process?
A) Full disclosure
B) Less expensive than litigation
C) Overcomes power imbalances
D) Redress for injury
E) Consistent outcomes
Answer: B
Diff: 2 Type: MC Page Ref: 65
Topic: Ch. 3 - Mediation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
,6) There are many characteristics associated with the use of the court process that may be
considered advantages and disadvantages when compared to alternate dispute resolution. Which
of the following is a favourable characteristic one would associate with the litigation process?
A) A speedier method of obtaining resolution of a dispute
B) A less costly method of obtaining a resolution to a dispute
C) A method of dispute resolution where both parties are more likely to be satisfied with the
outcome
D) Enforcement of the decision has direct mechanisms
E) Confidentiality is protected
Answer: D
Diff: 2 Type: MC Page Ref: 63
Topic: Ch. 3 - Advantages of ADR Versus Litigation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
7) Which of the following statements is true?
A) Use of ADR precludes parties from litigating.
B) The rules of precedent apply to arbitration hearings.
C) Mediators have the power to enforce decisions.
D) ADR methods are less costly than adjudication.
E) The public is entitled to know the result of mediated cases.
Answer: D
Diff: 2 Type: MC Page Ref: 63
Topic: Ch. 3 - Advantages of ADR Versus Litigation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
8) A negotiation will most likely lead to agreement when the parties are
A) aggressive.
B) uncommunicative.
C) coercive.
D) vulnerable.
E) equal in power.
Answer: E
Diff: 2 Type: MC Page Ref: 65
Topic: Ch. 3 - Negotiation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
, 9) Which of the following will contribute to the success of a negotiation?
A) One party is more powerful than the other.
B) The parties rely on outsiders to put forward their cases.
C) All relevant information is brought forward by both sides.
D) One of the parties uses coercion to get an agreement.
E) One party dominates or controls discussions.
Answer: C
Diff: 2 Type: MC Page Ref: 65
Topic: Ch. 3 - Negotiation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
10) Which of the following best describes the process of mediation?
A) Rigid
B) Structured
C) Cooperative/flexible
D) Time-consuming
E) Controversial
Answer: C
Diff: 1 Type: MC Page Ref: 65
Topic: Ch. 3 - Mediation
Skill: Recall
Objective: Chapter 3: 1. Examine the alternative dispute resolution (ADR) methods: negotiation,
mediation, arbitration.
Bloom's Taxonomy: Knowledge
11) (Modify this question for your province.) Fred sold Carole some computer equipment and
software for $900. After she paid $300, Carole quit paying. When she had no complaint about
the items but just wouldn't pay, Fred decided to sue. He would most likely begin his action in
A) Small Claims Division, Provincial Court.
B) Criminal Division, Provincial Court.
C) B.C. Supreme Court.
D) B.C. Court of Appeal.
E) Federal Court.
Answer: A
Diff: 1 Type: MC Page Ref: 71
Topic: Ch. 3 - Trial Courts of the Provinces
Skill: Applied
Objective: Chapter 3: 2. Describe the court system in Canada.
Bloom's Taxonomy: Knowledge
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