Sherman Act, Interest-based Negotiations, and Substantial Performance

The ___________ holds that contracts or conspiracies in restraint are illegal only if they constitute undue or unreasonable restraints of trade and that only unreasonable attempts to monopolize are covered by the Sherman Act.

rule of reason

Explanation: The rule of reason is a legal principle that draws a line between healthy competitive behavior and unreasonable market manipulation.

Interest-based negotiations are superior to position-based negotiations because:

interest-based negotiations allow room for consideration of non-factual concerns, such as relationships and long-term interests.

Explanation: The main purpose of interest-based negotiation is to find a win-win agreement for both parties. The parties will act as team members looking at the underlying drivers of a potential agreement, such as relationship and long-term outcomes. Position-based negotiation is more like pitting two adversaries against each other, often resulting in only one party’s benefit.

The determination that a crime has been committed and that evidence is sufficient to warrant the accused standing trial is known as:


Explanation: An indictment occurs when formal charges have been brought upon an accused suspect in a crime. There must be sufficient evidence to warrant the individual. This differs from probable cause, which is only reasonable grounds to perform an action, such as a search and seizure.

Which of the following is true under the regulations of interstate commerce?

Regulation on any activity is appropriate if it aids interstate commerce.

Explanation: The federal government has the power to regulate interstate commerce and this power can be exercised when the intentions are to aid existing commerce laws. Federal regulation can even be passed when it is purely intrastate in nature, as long as they aid commerce.

Finishing the construction of a home two days after the contract called for completion (no injury occurs) most likely will be considered

substantial performance

Explanation: The doctrine of substantial performance comes into play when a party has completed MOST of the contractual obligations, but NOT ALL of them. In this case, the construction of a home is a major project and a two-day delay without injury would not constitute a breach of contract.

  • Student: Gilbert Henderson
  • Textbook: Corporate Ethics and Moral Principles
  • Course: ETH 321

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