Skip to content

ACCA Applied Skills · Corporate and Business Law (Global) · Alternative dispute resolution mechanisms

Two companies, Alder Ltd and Brenx Inc, are in dispute over late delivery of goods. Their managers meet without any outside person and try to reach a settlement themselves. Which description best fits this process?

This is negotiation. The parties themselves discuss the dispute and try to agree terms without any neutral third party. Mediation needs an independent mediator, and arbitration needs an arbitrator who decides the outcome, neither of which is present in this scenario.

  1. ANegotiation, because the parties themselves try to agree terms without a neutral third partyCorrect
  2. BMediation, because the parties meet to discuss the dispute
  3. CArbitration, because the parties try to resolve the dispute outside court

Explanation

Negotiation is direct discussion between the parties with no neutral third party. Mediation requires an independent mediator to assist. Arbitration involves a third party who makes a decision, which does not happen here.

Did you get it right without looking?

One question tells you little. A timed set on Alternative dispute resolution mechanisms shows your real accuracy, how long you take and where you lose marks.

Practise Alternative dispute resolution mechanismsFree diagnostic mock

More Alternative dispute resolution mechanisms questions