Negotiation:
Main page:Preface
Extract 1 : The
skills and plan
Extract 2 : Practical exersice and claimant
Extract 3 : Transcript
& Analysis
Transcript and Analysis:
Mr. Cliff (Claimant) Good Morning, my name is Mr. Cliff; I am here to represent Quick Art.
Mr. Dowett (Defendant) Good morning Mr. Cliff, I am Mr. Dowett, representing the Defendants in this matter. Firstly shall we agree when we talk about sums that we are including VAT.?
Mr. Cliff Yes that is fine
Mr. Dowett (Quickly) Shall we proceed? Would you like to begin?
Mr. Cliff Yes, thank you. I would like to summarise my clients position briefly first. My client is of the opinion that the goods supplied to your client where on the whole of satisfactory quality and were fit for purpose under the terms implied into the contract under the Sales of Goods Act 1979. I feel that there is little evidence that the contracts - which were speculative at best - fell through on the strength of your client assertions that the goods did not meet these implied terms. Further I feel that there is strong evidence to show that the state of the goods, if held to be breach of the implied terms by the court, would be not treated as breach of condition, as under 15A of the SGA the breach would be treated as minimal. Therefore there is little possibility that the goods could be rejected. There seems little reason why the goods could not have been sold to other customers and there seems to have been a failure to attempt to do this. That summarises my clients general position adequately I think. (gesturing)
Mr. Dowett Right I see. I would like to deal with my client's position briefly if I can. My client is of the opinion that the goods were not of satisfactory quality or fit for the stipulated purpose. However I must inform you that despite my clients initial position that the goods were unsellable, instructing solicitors inform me that he has tried to sell some of the goods and been successful in selling 100 of the covers to date, therefore my client has greed to pay your client for these, the sum of £3,000 + VAT, the original price for these.
Mr. Cliff I see. That is certainly good news for both our parties. However I would ask as a good will gesture your client pays £3,500 + VAT for the goods because of the delay in payment.
Mr. Dowett I think perhaps that it is a little high, especially is your client is claiming interest as well, so I would be prepared to offer £3,250 on behalf of my client.
Mr. Cliff Hmm… Yes… I think that could be acceptable. However I would ask that if I agree to those that the payment will be made within 7 days.
Mr. Dowett Yes, I think that will acceptable (both parties write down the details). Now back to my client's position. Scaliber maintains that there was an agreement that the design would be white, and as not they could not sell on some of the goods to Zammo. As such they have lost potential future business. They maintain that they were not aware that there had been an agreement that the goods may not meet the exact specification of the design. As regards the contract with Akea they have lost a potential contract due to the unsatisfactory quality of the goods. My clients maintain that they mitigated their losses by getting the goods repaired and now be selling the goods.
Mr. Cliff - I see
Mr. Dowett - Shall we now go on to discuss each contentious issue in turn?
Mr. Cliff - Yes I think we're both clear of our initial positions. I would like firstly like to come to the issue of the payment for the rest of the covers. This is £12,000 + VAT for the remaining 400 covers. Firstly it was stated the design may differ from the original one, as shown by the witness statement of Mr. Smith (Note: Herein referred to as GS). This was agreed upon by a representative of the company of the Defendant. Thus this was an oral term of the contract and the Claimants were not in breach of the contract as regards to it (breaks)
Mr. Dowett - Yes how - (interrupted)
Mr. Cliff - If I could please just finish this point Mr. Dowett, furthermore it would appear the design exhibited by the sketch drawn by Mrs. Stewart, Exhibit AS1 was indeed followed out. Therefore for all intensive purposes there are strong arguments to show that the covers were of satisfactory quality as regards the design.
Mr. Dowett - hmm I see….Whilst my client admits that the design was in accordance with the plans apart from the colour, Mr. Harte (Note: Herein referred to as GH) in his witness statement at para 1 states how he stipulated expressly in a phone conversation that the covers where to be white, thus any deviance from this should not have occurred. In support of this fact the Defendant, through the statement of GH para 1 shows how they an order from Zammo and thus there must be strong inference that the goods had to be white.
Mr. Cliff - Yes, indeed, but my client did inform yours of the fact of possible deviance and that would supercede the initial statement chronologically. Also, GH can't remember if he did tell my client of the resale…
Mr. Dowett - However, the Defendant maintains that he was not aware of this at all and there would seem evidential difficulties with finding Mrs. Stewart. Indeed there is a strong inference that had he known he would have expressly told the Claimants that this was not acceptable, at least in regards to the white background.
Mr. Cliff - Yes I can see that is certainly probable. However as regards to fitness for purpose the covers were certainly fit for purpose as regards the design. There is no express evidence that it was stated that the covers be white for resale.
Mr. Dowett - No maybe not but that could be an inference drawn by the fact that it was stated that they should be white and from this that was because they were for resale.
Mr. Cliff - However it wasn't expressly stated and furthermore, I believe even if it was, the evidence is that this was qualified by my client at a later date as per the statement of GS.
Mr. Dowett - My client however is certainly in a strong position as regards the fitness for purpose of the covers due to the rips. They were ripped and thus they were not only not fit for the purpose that they are commonly supplied, that been to cover sofas, but they were also of unsatisfactory quality due to the rips.
Mr. Cliff - Hmm… I don't think that there is any doubt that we are only talking about a very small percentage though (interrupted)
Mr. Dowett - Well 20%
Mr. Cliff - Yes, only 20% of the covers judging by the invoice of GH (interrupted)
Mr. Dowett - Only 20%? (Slightly in disbelief) Mr. Cliff you must be aware that this made up a substantial part of the order for my client and caused him loss. (firmly)
Mr. Cliff - (hesitates) Yes indeed. Sorry it was not my intention to appear to be suggesting that this was not a significant amount. My intention was to suggest that at least in regards to the quality and fitness of purpose of the covers we must confine our discussions to 20% of the covers.
Mr. Dowett - Yes that is agreed. Thus as my client has paid for the repair of the goods here costing £1,000 this should be discounted from the cost of the goods. As is clearly shown in relation to invoice GF1.
Mr. Cliff - I have some reservations about that figure. Firstly because my client commissioned a quote from Rapido Repairs, stated in exhibit RF1 that shows that the repairs should come to about £500. Half the sum that GF charged.
Mr. Dowett - Yes, however, it clearly states that due to the extent of the damage this could go up.
Mr. Cliff - Hmmm... Yes… however GH admits to checking some 200 covers himself in his witness statement thus this should discount the amount of £200 judging by the estimate of GF1
Mr. Dowett - However he is not a professional, and there is no evidence that he subjected them to the same searches, thus I would think that al things taken into account a sum of £950 plus VAT would be reasonable in the circumstances.
Mr. Cliff - Yes that would seem acceptable to me. That's £14,050 plus VAT (Both write down the details) Are we agreed upon the issue of the satisfactory quality and fitness for purpose of the goods?
Mr. Dowett - I think in the circumstances we are, however I would like to leave any express agreement subject to that which we yet have to discuss. I want to be clear that this figure represents only a figure for the worth of the goods, we of course have still to discuss my clients claim.
Mr. Cliff - Indeed, would you like to proceed first?
Mr. Dowett - Yes thankyou. Firstly as regards to Akea. As evidenced by the letter AK1 we lost a prospective contract with the Defendants due to the fact that the goods were not of satisfactory quality, or fit for their purpose. Whilst admittedly the contract was not certain, there has been 20 plus arrangements and in the words of GH in his statement nothing like this has happened before. Thus we see that the lack of quality of the goods as regards the design colour of the goods has proved unsatisfactory to Akea and they have refused to enter in to a contract that was worth £6,000 VAT
Mr. Cliff - Yes… I don't think the evidence is that strong at all. There doesn't seem to be evidence contained in the exhibit AK1 or anywhere else for that matter as regards the Akea requirement for white colour of the design thus I think any recovery would be highly speculative, and likely to fail on grounds of remoteness. Not to mention that there was a sofa supplied with the design as well, and this could have been to blame, equally if not more so, for the loss of contract.
Mr. Dowett - With respect I completely disagree. The fact that the claimant states that 20 plus such deals have taken place before now not only goes to show that there was a significant likelihood of the contract been awarded to the Defendants, but also goes to prove the fact that their is a very high chance that the loss of the sale was down to the design.
Mr. Cliff - I think that we have reached a definite differing view of the facts here, shall we leave this issue until we have discussed the Zammo loss, and perhaps try and tie something in with that?
Mr. Dowett - Ordinarily I would agree Mr. Cliff, however, this issue is of paramount importance to my client and I always prefer to deal with each issue separately.
Mr. Cliff - Yes…. I see… okay, I think a reasonable sum would be, based on the situation as I see it, £3,000 plus VAT for the loss.
Mr. Dowett - I think representing the one in 20 likelihood of the loss not been attributed to the covers that £5,500 plus VAT would be a far more acceptable figure.
Mr. Cliff - I can see that we have a very wide difference in our sums here. I could only agree to such a sum, based on my view of the facts, if your client was to accept the costs in that matter to date, of £400, and to pay interest up to the date of today at 4 months exactly since payment was due on £15,000. This also comes to £400.
Mr. Dowett - That would be acceptable if we can agree on a figure of £700, not £800
Mr. Ciff - This figure does not include VAT however. I am prepared to settle for £750
Mr. Dowett - That is acceptable to my client. That would be £4,750 plus VAT (both parties write down the agreement) I would now like to turn to the issue of the contract with Zammo Ltd. Here it was expressly stipulated that the contact had to be for white covers, so as the covers where not white they were not fit for the purpose of the contract. As a result my client lost £1,200 plus VAT. Please refer to ZM1 for evidence of this.
Mr. Ciff - Yes… however there has been an offer to purchase at a greatly reduced price
Mr. Dowett - Yes a greatly reduced price, and as I have foregone the issue of a sum on reduction of the sum for the brochures
Mr. Cliff - Didn't we agree upon this already?
Mr. Dowett - No I have quite a clear note of this here Mr. Cliff. £14,050 to be agreed subject to the rest of the negotiation.
Mr. Cliff - (almost begrudgingly) Oh yes
Mr. Dowett - And as such as I have done so I would ask that the £1,200 be awarded to my client as regards the loss of this contract. In addition there is strong evidence from GH that the business relationship has been damaged. Therefore this is a final offer on this sum, and if it is accepted then I will agree to the £11,050 plus VAT sum.
Mr. Cliff - (long pause) Yes that would seem acceptable to me. Shall we write down our final sum so we have something solid?
Mr. Dowett - Yes indeed, I make the final figure to be £14,050 minus the £1,200 and the £4,750 comes to £8,300 VAT owed by my client to yours.
Mr. Cliff - I agree
Analysis:
The Initial Exchanges
All in all quite a successful negotiation for both parties, and conducted, 99% of the time in a highly professional manner. However as well as many points to take form the transcript that are positive there also a few places for improvement too.
Let's begin from the top. There is an initial polite hello this gets things off on the right foot. There is also an agreement on VAT so neither party is under any mistake as to what sums are been discussed. Then, politely Mr. Dowett (all be it swiftly) offers that Mr. Cliff to go first. This can be very advantageous. By making ht first move Mr. Cliff is disclosing his client's position to Mr. Dowett, and may tip off Mr. Dowett as to something that he wasn't aware of or hadn't thought of. However Mr. Cliff is aware of this and states that he would like to summarise his clients position briefly enough to limit this to the basics. He is careful not to blurt out something like "My client would like at least £10,000 for the covers" to do so would be akin to suicide. The position that he states is certainly optimistic without being ludicrous. Thus he is affording himself room to be moved form this position. Far better than citing a wholly accurate analysis (in terms of strength) of the case off the cuff. Against weaker opponents that find it hard to take ground this can be highly beneficial. If Mr. Cliff had disclosed his client's interest to settle for £10,000 then Mr. Dowett could drive as hard as possible safe that Mr. Cliff was likely to accept. Mr. Dowett offers Mr. Cliff the same brief statement of case and he states the case of his client briefly. He tells Mr. Cliff of the change in position of the negotiation. This is good practice. It would be a waste of time to withhold this information until deep into the negotiation and also be highly unprofessional. There is an obvious difference between this and blurting out your clients objectives.
Mr. Dowett offers £3,000 off the bat. Indeed this is unusual, as we shall see, as the offer is the lowest reasonable offer (rather than been lower then what is reasonable). Yet here as the goods are only worth 3, 000 and there has been delay in payment, any other offer would likely be more insulting then successful. Mr. Cliff counters with £3,500 - remembering to aim high (for your client's objectives not necessarily figuratively speaking!) - and this is swiftly chopped to £3,250. A compromise has been reached. However Mr. Cliff counters with a pause - purely designed to show he is not sure (or act as if he isn't), and introduces the proviso that payment must be within 7 days. Remember his clients wishes that some of the money is delivered quickly due to cashflow problems. Importantly both of the parties write down the agreement. Within 2 minutes Mr. Cliff has completed an objective and also got some extra cash for lateness of payment. Certainly successful for him, and not too bad for Mr. Dowett either. This first exchange will also hopefully set the tone to come for the entire negotiation.
Interestingly the plan we set out has been derogated from already. There is no need now to discuss the possibility of implied acceptance under section 35A if the SGA 1979 as there has been an act inconsistent with the ownership of the seller so the issue simply doesn't arise. Always be prepared to use your plan in a flexible way.
The Sofa Covers - Implied Terms
Notice the sum now being talked about changes. The parties have already taken 20% of the covers out of the equation. Mr. Cliff breaks into his submissions. They are certainly far stretched and he knows it. Here is the time to strike against a weak opponent. Mr. Dowett attempts to take the floor to try and break into the optimistic statement of the facts by Mr. Cliff, but Mr. Cliff holds the floor well and continues. He has asserted some authority here without losing his polite demeanor. So this is an important initial score for Mr. Cliff. Although not to the detriment of Mr. Dowett, who was also trying to break the flow with a quick off the mark approach to take the floor. Mr. Dowett responds with a quick I see - indicating that he is not convinced by this, and then pauses to strike home the point. He counters the evidence as to fitness for purpose of a white design with the fact that the Defendants were relying on this proviso because of a contract already in the making with Zammo. He deliberately ignores the fact that his clients rep may have been told that there may have been deviation. Mr. Cliff spots this and reiterates the point to him and tails off passing the fall right back to Mr. Dowett. He in doing so puts pressure back on Mr. Dowett to address the point, Mr. Dowett makes an excellent point based on common sense, that if the Defendant did know of this then he would have informed the claimant that there was not to be any deviation as there was the contract with Zammo and that there is the problem of finding the rep too.
Perhaps Mr. Cliff could have said how people often forget such facts? However Mr. Cliff in his mind realises that on this point he is beat and swiftly moves to stronger ground for his client. Or does he? If you look closely he simply repeats himself in a different manner to before. Mr. Dowett makes his first mistake and doesn't spot this. Instead he says "my client certainly was in a strong position however regarding the covers fitness for purpose due to the rips". Here, he is indicating that his confidence as regards his client's position has been knocked. He could have quite easily started the sentence "as regards the rips in the covers, my client maintains" for the same effect but with out showing the weakness. A point is scored for Mr. Cliff in moving Mr. Dowett position closer to his without losing as much ground as his opponent. Mr. Dowett carries on and states a high opening position on the ripping of the covers. Mr. Cliff, with the confidence boost seeks to try and belittle the worth of the claim here saying "only 20%" - a weak opponent here may have wavered but Mr. Dowett takes issue with this and there is an exchange - but he conducts it calmly and firmly - and the situation is resolved. Mr. Cliff proffers an apology. A definite swing in momentum back to Mr. Dowett. However notice how there was friction in the negotiation here, but still, due to the experience of the opponents, they remained collected and clam. And straight away they are back to a more amicable approach. It is all too easy to let personal battles over cloud the client's interests, and both are mindful of this.
There then follows a standard trade of points and movement, with another well used pause by Mr. Cliff. Mr. Dowett with a confidently put, but weak point put about GH not being a professional checker offers a sum of £950. Here Mr. Cliff sees an opportunity - he has deflected the conversation onto both issues at the same time, perhaps the slight rattling of Mr. Dowett in the earlier exchange was intentional? He has managed to get a sum a provisional final sum for the implied terms and thus he has secured the initial figure minus only £950. (£11,050 plus VAT) A definite win at this stage for Mr. Cliff. However bear this in mind as we shall come back to this.
The Sofa Covers - Loss of Profit
We now move on to the counterclaim. As regards the Akea matter there is some standard high aiming and successful movement for a while, yet there the parties meet a possible stalemate. Based on their views there is far too much space to navigate a sum. Neither wants to move that far to meet the other on middle ground. Mr. Cliff makes a move to try and tie in the issue with another, a usual tactic and a good idea. Yet Mr. Dowett decides a more competitive strategy could be more successful here and, addressing his opponent as "Mr. Cliff" (a useful device for control - if not used too often) distances himself from his opponent and sticks to his guns. The momentum is certainly with him as he has given Mr. Cliff a provisionally excellent settlement with the £11,050 sum. Thus Mr. Cliff has some impetus to move and does - with a very low sum (aiming high for his clients objectives) - knowing that this provides himself with a lot of breathing room. Especially important as not much is agreed upon here. Mr. Dowett is also equally aiming high, showing little movement. Mr. Cliff realises that the process could be in trouble here and introduces a secondary bargaining tool. In effect he has done what he wanted to do earlier but by the backdoor and whilst appeasing the wishes of Mr. Dowett. The parties wrangle over the minor details of the costs and interest and a successful outcome is reached.
Mr. Cliff must be pleased and is arguably still on top overall. There is only the Zammo issue and other mitigation matters to be discussed. Mr. Dowett knows that these are his strongest and weakest parts together. He realises that the failure to mitigate at all, bar the repairs, could substantially affect his client's award of damages. So he goes in with a brutal and strong stating of the facts - that Zammo needed white covers. Mr. Cliff parries with the fact that there was an offer to buy at a reduced price, and then Mr. Dowett pulls out the secret weapon that he fooled Mr. Cliff with. The provisional sum that was agreed earlier of £11,040. He has made a note of it in case, Mr. Cliff thought he had out foxed Mt Dowett, but here Mr. Dowett has placed his ace card. He knows that Mr. Cliff is leading the negotiation in terms of the most beneficial settlement for their client. Therefore the impetus for movement still stays with Mr. Cliff.
Conclusion
Mr. Dowett now makes a very good judgement call. Be very careful should you choose to do this. You have to be sure; otherwise the whole process can come toppling down. He stated that full figure cannot be moved form, especially as there is evidence of the loss of business relations. Mr. Cliff, with a long pause, assesses his position -is he going to walk out in a stalemate- or have his clients objectives been met to a satisfactory level? He agrees to the sum and the negotiation is completed ending in a well fought draw for both parties.
Main page:Preface
Extract 1 : The
skills and plan
Extract 2 : Practical exersice and claimant
Extract 3 : Transcript & Analysis
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