I INTRODUCTION
The construction industry has the unenviable reputation of being adversarial and dispute prone. This is attributable to the scope, scale, duration and complexity of projects, which can lead to differences of opinion on complex technical, factual and legal issues. If not resolved quickly, these differences of opinion can lead to expensive and drawn out disputes. The competitive nature of the industry, low profit margins and commercial pressures when progress payments are late, unfair risk allocation, perceived bias of the superintendent and lack of procedural fairness in contract administration, creates a climate that is conducive to adversarial conduct especially when this combination of technical, factual and legal
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Most parties negotiate to win but usually end up either with the minimum acceptable result or with the other party feeling abused and longing for revenge. Even with cooperative negotiators there is a natural reluctance to put everything ‘on the table’. Whether cards are played close to the chest, giving little and slowly or more openly, most deals leave crumbs or chunks on the table that could have been used up in making a richer deal. The annoying thing is that nobody knew that a richer deal was within reach and possible.
II UNDERTAKING DEAL MEDIATION PRIOR TO A PROJECT INCREASES THE LIKELIHOOD OF THE SUCCESSFUL COMPLETION OF A PROJECT
Dealmakers may sit down and try to project difficulties and how best to tackle them to pave the way to getting the richest deal possible.
A. Clause in contract
Many construction contracts require dealmakers to negotiate. Some clauses contain an obligation to negotiate in 'good faith '. Ideally parties should add clauses regarding:
a. Force majeure and latent conditions
b. Price
c. Materials to be used
d. What to do in unforeseen circumstances
e. ADR.
However, the law concerning the requirements of 'good faith ' is not settled. Aition Australia v Transfield provides some indication of the requirements. A duty of good faith in negotiation does not require that agreement be reached between the parties and requires a party to subject itself to mediation with an open mind, with a willingness to consider options for resolution.
Negotiations are a part of daily life whether we are aware of them occurring or not. In everything that we do there are preferred end results and the end results are likely to affect more than one person. The goal in this however, is to ensure that all parties are equally benefited from the actions and reactions that occur to create that end result. While some dealings are done in a more subtle manner without a great deal of negotiation per say there are other situations that would warrant more vocalized mutually acceptable compromises. The purpose of this paper will be to effectively explain a situation of which required negotiation on the part of both parties that almost all of us have endured and that would be the process of buying a
Negotiation is a fundamental form of dispute resolution involving two or more parties (Michelle, M.2003). Negotiations can also take place in order to avoid any future disputes. It can be either an interpersonal or inter-group process. Negotiations can occur at international or corporate level and also at a personal level. Negotiations often involve give and take acknowledging that there is interdependence between the disputants to some extent to achieve the goal. This means that negotiations only arise when the goals cannot be achieved independently (Lewicki and Saunders et al., 1997). Interdependence means the both parties can influence the outcome for the other party and vice versa. The negotiations can be win-lose or win-win in nature.
“Successful negotiation is not about getting to ‘yes’; it’s about mastering ‘no’ and understanding the path to an agreement is” (Christopher Voss). During the negotiation process, there are a lot of moving parts and personalities. In addition, hurt feelings can all too often get in the way. The bottom line of any negotiation is to reach a settlement that will mutually benefit both parties. It’s a challenging situation by which compromise or agreement is reached while attempting to avoid arguments and disputes.
There is no general definition of good faith under English contract law; it is generally a presumption that two parties will act honestly and fairly with one another. Unlike other systems of law, such as the French Civil Code, English contract law does not recognise the obligation of ‘good faith’. Instead there is more of a negative obligation not to tell lies rather than a positive obligation to tell the truth and act in good faith. However recent cases such as Yam Seng PTE Ltd v International Trade Corporation Limited have shown that the courts attitudes towards good faith have been developing and changing. Now it may be possible to imply a term of good faith in a contract. Therefore, where traditionally there has been a negative obligation not to tell lies, English contract law may be slowly moving towards an obligation of good faith.
In the construction business, where it is all about metal, concrete, heavy duty machines and equipment, words may find themselves a lot out of place. But over the years, they have proved their lethal might in the construction business where legal outings have become common. Shaped in the form of a contract, these words have found its rightful place of respect in the form of The International Federation of Consulting Engineers (commonly known as FIDIC), New Engineering Contract (NEC3), Royal Institute of British Architects (RIBA), Joint Contracts Tribunal (JCT), Infrastructure Conditions of Contract (ICC), etc. These are standard contract suites applied world over and each come with its own advantages and disadvantages. In this
Consequently, negotiation is a process that can be approached in many ways. No matter what strategy we choose, success lies in how well we prepared. The key to negotiating a beneficial outcome is the negotiators’ ability to consider all the elements of the situation carefully and to identify and think through the options. At the same time, negotiators must be able to keep events in perspective and be as fair and honest as circumstance allows. Because a common ground or interest has brought the parties to the negotiating table, a negotiator can benefit by trying to capitalize on this common
Simply put resting at a conclusion after a negotiation may not necessarily be the ideal outcome unless cooperative is achieved by both parties. Bargaining in general could involve parents, friends, teachers, spouses, employers, and so on (Anderson, 2013). Likewise companies also negotiation contracts with one another or individuals involved within the companies.
In chess you know the pieces but you can’t see into the other person’s mind. In negotiation you don’t necessarily know the ‘pieces’. You have to discover and develop your own pieces and find ways of uncovering your counterparts’.” The Essentials of Job Negotiations, (2011)
It occurs in profit or non profit organizations, government sectors, dealing among nations and also in our personal situations such as salary package, house purchase, marriage, divorce and etc. The strategy to use can either be distributive or integrative depending on the situations and the outcomes that the party want out from the negotiation.
In the "Cascade Manor" negotiation, I played the role of co-chief city planner. I was part of a team, partnered with the other co-chief city planner and the city's financial director. It was our task to negotiate a deal with a development corporation who wanted to build a residential housing community to revitalize the historic district of our city. We devised a strategy on how we would open and negotiate on the issues. Using this strategy we were able to agree to a deal with the developers, and walk away with a sizeable amount of the "pie". This paper will look at how offering multiple package deals help the negotiator claim resources, and suggests ideas on how to develop an effective multiple offer strategy.
In construction projects, mostly the firms (in this case the firms become client) do not have the skills or develop skills inside the firms to undertake the projects due to amount of the projects should be conducted or the complexity of the projects (Reve and Levitt, 1984). Therefore, the economic decision to conduct the projects is to procure them to third parties. However, more commonly the client agonize the final quality of the projects will meet standard requirements. Thus, impacts to involvement of complex contracts of construction procurement.
Whether it is at work, church or in our private relationships, negotiations are a necessary tool for reaching an agreement. They are made by discussing each parties point of view with the aim being to reach an agreement that is mutually beneficial. For the most part, negotiation is the process by which those people involved successfully adopt or abandon their respective position through the use of positional bargaining. There are different types of approaches for the negotiation process - some hard and others soft in their manner of approach. The desired outcome of
When entering into contract negotiations, the objective of each side is to obtain a contract of greatest benefit to their organization. This desirable outcome never happens by chance; it is always the result of careful planning. A critical part of this planning is understainding the role of power. This includes determining who possesses the power in bargaining, and establishing strrategies to bargain with individiuals who have more power than you. This power is needed to obtain the advantage in negotiating which will increase the liklihood of obtaining the goal (Lewicki, Saunders & Barry, 2011). Once in the heat of negotiation, it can be too late to try to catch-up on planning which failed to occur before the negotiation process began.
Despite various construction acts, regulations, standards, codes, licensing regimes, other management approaches such as quality management, risk management, defect management building are still handed with defects. It is evident from Queensland Building and Construction Commission (2015a) annual report that in 2014/15 alone received 4,793 complaints about defective work. There are many other defects that are seen to occur during the construction process, which gets rectified before the practical completion and does not appear on QBCC top ten lists (Sommerville & McCosh 2006). It is this phenomenon that led to the investigation that is described in this study.
To complete a construction project on a date fixed, both parties have to agree upon the price and product specification. If the project does not fit the contract specifications, the client has the right to withdraw from it. However, Al-Muhit al-Burhani reported that Abu Yusuf has opinion on the contract of Istisna’ which are treated bind from the first stage because no one has the right to invalidate the contract on reason. Differently, the manufacturer will be harmed and it is possible that he will not find anyone who will buy the goods from him in time or he may not get a same price as agreed upon with the first purchaser. Moreover, the manufacturer has undertaken to do the job then he should be obliged to complete