In the October 2007 issue of the Negotiation newsletter, the unnamed author discusses “The Crucial First Five Minutes.” The theme of the article is that what we say, think and do upon meeting someone sets the course and tone of the relationship: to avoid starting off “on the wrong foot,” two common mistakes should be avoided.
  

           The first common mistake involves making snap judgments. Whenever we meet someone, we absorb a lot of visual information and cues which we synthesize into a “profile” of that person. While in certain instances, this distillation process may serve us well, it does not do so when we are making deliberate high quality decisions. If anything, the “snap” judgment may cause us to misread the other person, and then implicitly and unconsciously to act on our misassumptions. Through our body language, we convey these misassumptions to the other party, thereby unwittingly and unknowingly cause the relationship to get off to a bad start. Consequently, we must be conscious of our implicit biases, attitudes, assumptions and avoid misjudging a new acquaintance.
     

       The second common mistake is to be guarded when we meet someone new. Often, out of fear, we tend to be guarded and defensive rather than open and cooperative. As a result, the negotiations get off to a bad start. A better way to start off is simply to start with small talk. Rather than getting immediately down to business, chat with the other person on unrelated topics. Such conversation builds rapport and trust. Studies have found that “. . . pairs who chatted for just 10 minutes about topics unrelated to their upcoming negotiation shared more information, made fewer threats, and developed more respect and trust during talks than pairs who” got right down to business. (Id.)
     

        As an aid to avoid this second common mistake, consider the settings for your negotiations. Where you meet the other party can be critical to the outcome. The setting itself can color or impact your judgment. While conventional wisdom states that it is always better to hold a meeting in your own office rather than the other party’s, you can gain a wealth of information by viewing your opponent’s settings. There are many visual cues available that will help you understand the other party much better and quicker. Further, by agreeing to travel, “you convey a strong attitude to make a deal.” (Id.)
 

      In contrast, meeting in a neutral location robs both you and your opponent of the opportunity to learn each other through the myriad of visual, non-verbal cues found in all of our offices.
  

           Another aid to avoid these mistakes is be prepared to be surprised. Try to anticipate the difficult or obvious (or not so obvious) yet critical questions. Doing this may entail some role-playing in advance in which you ask open-ended questions and actively listen to the responses.
   

          While the above tips address the issue of one-on-one negotiations, they are equally applicable to mediations. Mediation is just another form of negotiation. Avoiding assumptions or snap judgments about other parties to the mediation and engaging in social conversation for the first few minutes to put everyone at ease, works quite well in mediations. Once you get to know a person, the “human” element becomes part of the process. It, then, becomes much easier to resolve the dispute precisely because of that “human” element.
 

      . . . Just something to think about.     

      Last weekend, I made a presentation on Alternative Dispute Resolution at the Western Cargo Conference (“WESCCON”) in Denver, Colorado. My audience consisted of customs brokers, freight forwarders, warehouse owners and others involved in the transportation and logistics industries.
 

      My presentation focused on defining Alternative Dispute Resolution, explaining the various forms or models it may take (e.g. negotiation, mediation, arbitration, neutral fact finding, mini-trial, early neutral evaluation, private judging, and collaborative law), discussing the use of ADR in everyday business and providing sample clauses that could be incorporated into contracts and other business forms. (For more on this, see pgpmediation.com/wesccon).
    

       After the presentation, one of the participants told me how “empowering” my presentation had been. As a small business owner, she lived in fear of making an error or at least an “error” perceived by a client and being sued over it with all of the attendant attorneys’ fees and costs that comprise litigation. She had been to small claims court once before and found it quite unsatisfying as the judge did not even listen to her, but simply and literally made a “snap judgment,” without most of the facts. She did not want to deal with attorneys as they were too expensive and time-consuming. So, she dealt with the issue of “how to deal with conflict with a customer” by avoiding it and living in dread of making a “mistake” and getting sued.
 

     My presentation gave her a way out of this dilemma: a middle ground;  a way to deal with conflict without all of the anguish and expense involved in litigation. By simply incorporating and requiring one or more models of ADR (such as mediation, or arbitration) into her Customs Power of Attorney, Service Agreement, Terms and Conditions of Service and/or Bill of Lading, etc. as a pre-condition to filing a lawsuit, she provides her company with the means to resolve conflict, without the anguish inherent in litigation. While admittedly, not every matter will settle through mediation, in all probability, most of the disputes will get resolved through such a process. More importantly, the use of ADR will force the parties to focus on the dispute and resolve it before they become too invested, entrenched and hardened in their positions. 
    

      Consequently. . . she felt “empowered” – I had given her a means to resolve business disputes without having to declare war or live in fear that war would be declared on her. And the means I had provided is simple, inexpensive, flexible, voluntary, confidential, and totally controlled by the parties. Clearly – a win-win-outcome.
    

       Before this presentation, I had never thought of ADR as empowering. . . but clearly. . .  it is.
  

         . . . Just something to think about.
 

       Aristotle once noted:

      “. . . we feel confidence if we believe we have often succeeded and never suffered reverses, or have often met danger and escaped it safely. For there are two reasons why human beings face danger calmly: they may have no experience of it, or they may have means to deal with it. . . .” (Rhetoric, Book II, Chapter 5, p. 1383, lines 25-30).

      When parties face a dispute, either they are fearful or confident or a mixture of both. If confident, it is because either they have no knowledge of what lies before them or they do have such knowledge and are fully prepared for it.
     

       The parties face mediation in the same way. In a short essay by James Laflin entitled “Some Brief Notes On BATNA’s Risk Analysis and Overconfidence In The Mediation Process” in the California Tort Reporter: California Litigation Reporter published by Thompson-West (2007), the author notes that in a mediation, the parties negotiate by weighing the possible outcomes of trial “versus settlement and select the choice that offers the highest possible return at an acceptable level of risk.” However, often in deciding what to do, the parties “often have only the vaguest idea of the risks they face”:
 

           ” . .studies show that individuals who are less well informed about a subject or problem tend to feel subjectively more confident as to its solution or outcome while the accuracy of their predictions is worse than that of individuals who are better informed. That is to say that individuals who are better informed are less confident about the accuracy of their predictions, while their predictions are, in fact, more accurate.” (Emphasis original).

      Which, gets us back to Aristotle’s notion that people face “danger” calmly either because they are wholly ignorant of what lies before them or are very well prepared for it.   
 

      In attending a mediation, a party should think about Aristotle’s notion and try to understand whether she (and her opposing party as well) is negotiating out of ignorance or full knowledge and/or preparation. If the former, the outcome is liable to be worse than she (or her adversary) expects. If the latter, she (or the other side) may feel less confident but the outcome will be closer to what she expects. Further, according to Laflin, well informed negotiators tend to be more open to compromise and more accepting of the realities of the situation. Obviously, such openness provides a greater probability of reaching a resolution.
     

        The next time you attempt to resolve a dispute and find yourself to be calm, ask yourself, “am I calm out of ignorance or because I am fully informed?” Similarly, if you find that the other party is calm about the matter, ask yourself the same question: “is she calm out of ignorance or because she is fully informed?” The answer to these two questions will help you decide how to approach and resolve the dispute.
     

       . . . Just something to think about.  

       Recently, the California Court of Appeal for the Second Appellate District decided a “Lemon Law” case. In Isip v. Mercedes-Benz USA, LLC, Case No. B192382 (filed September 12, 2007), the appellate court was asked to decide whether the trial court erred by refusing to give a jury instruction proposed by Mercedes-Benz USA (“MBUSA”) on the implied warranty of merchantability. The appellate concluded that no error existed and affirmed the judgment.
 

       In June 2004, Plaintiff Marisa Isip purchased a 2004 Mercedes-Benz C320 from a Mercedes-Benz dealership. Purchasing it new for $46,797.84, she received a four-year/50,000 mile bumper-to-bumper warranty.
   

          After driving the car 3,900 miles, Isip began experiencing problems: “the air-conditioning emitted an offensive smell every time it was turned on, giving Isip a headache and making her sneeze. The car [also] made a loud tugging noise when she engaged the gear, and made a clanking noise when she released the brake in reverse.” Further, “[w]hen the car automatically shifted gears to pick up speed, the car pulled back, hesitated and then took off like a slingshot. It also hesitated and pulled back before slowing down. The engine made a loud knocking sound and there were fluid leaks. White smoke came out of the exhaust system.” (Id. at 2).
 

       Despite six attempts at repair during the first year, MBUSA could not repair the car. At the time of trial, “. . . the brakes still made a clanking noise, the transmission still hesitated, and white smoke still came out of the exhaust.” (Id. at 2).

        During trial, Isip testified that the car was worth only $10,600 to her in its present defective condition, even though she purchased it for $46,797.84 in June 2004.
     

       Plaintiff sued MBUSA under both express and implied warranties under the Magnuson-Moss Warranty Act (15 U.S.C. §2301 et seq.) and under the Song-Beverly Consumer Warranty Act (California Civil Code §1790 et seq.).
      

         At trial, MBUSA requested the Court to add the following language to California Civil Jury Instruction CACI 3210:
   

          “The implied warranty of merchantability does not impose a general requirement that goods precisely fulfill the expectations of the buyer; rather, it provides for a minimum level of quality which the law describes as being fit for the ordinary purposes for which such goods are used. In the case of automobiles, the implied warranty of merchantability can be breached only if the vehicle manifests a defect that is so basic that it renders the vehicle unfit for its ordinary purpose of providing transportation.”

      The trial court refused. They jury returned a verdict for plaintiff for $20,000 under her breach of implied warranty of merchantability claim under both the federal and state statute.
  

            On appeal, MBUSA urged its proffered instruction was correct based on American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal. App. 4th 1291, 1296 which noted:
   

          “Courts in other jurisdictions have held that in the case of automobiles, the implied warranty of merchantability can be breached only if the vehicle manifests a defect that is so basic it renders the vehicle unfit for its ordinary purpose of providing transportation.” (Ibid.)
  

        The appellate court distinguished this case noting that its context was much different than the one before it. The appellate court then turned to the language of the Song-Beverly Consumer Warranty Act – Civil Code §1791,1(a) – finding that the California Jury Instruction – CACI 3210 – accurately stated the statute. 
     

         On this bases, the trial court judgment’s was affirmed.
      

        In sum, the appellate court rejected “. . .the notion that merely because a vehicle provides transportation from point A to point B, it necessarily does not violate the implied warranty of merchantability. A vehicle that smells, lurches, clanks and emits smoke over an extended period of time is not fit for its intended purposes.” (Id. at 9). 
   

           . . . Just something to think about.