1. Negotiation

6. Negotiation Contractually Related Issues (Pg 551) Type of contract (1) Fixed price or lump sum (2) Cost reimbursable (3) Unit price Use of sub-contractors Liability of sub-contractors Ownership of jigs, tools, moulds, etc. Charges for use of patents need by supplier/purchaser Confidentiality and restraint of trade issues Payments in advance Sharings of savings due to improved design/production Changes to specifications and designs Milestone payments Disposal of surplus material Environmental issues Health and safety issues Inspection rights Conditions, warranties and guarantees Force majeure Dispute of resolution Non-compensatible delays Legal charges Cancellation rights Right of audit and openbook agreements Set of rights Some Contractually Related Negotiation Issues

9. When there is little latitude in determining their position or posture When they are held accountable for their performance When they have sole responsibility When they are responsible to a constituency present in the negotiations When they are appointed rather than elected Conditions that Prevent Spontaneous Response Negotiation

10. The Buyer’s Negotiation Position will be Strong If: Negotiation Demand is not urgent Suppliers are keen for the business Buyer is in a monosponistic position Demand can be met by alternatives/substitutes Make and buy options are available Buyer has a reputation for fair dealing Buyer has excellent supply market intelligence

11. Negotiation Who is to negotiate? The venue Intelligence gathering Negotiation objectives Strategy Tactics Conducting dummy runs Pre-negotiation Considerations

16. Model of bargaining Buyer Seller 5 8 9 10 13 Ideal settlement Ideal settlement Realistic Settlement Realistic Settlement Fall-back position Fall-back position

19. Negotiation Introductions, agenda agreement and rules of procedure Ascertaining the negotiation range Agreement of common goals Identification and removal of barriers Agreement and closure Stages of a Negotiation