Question 1

George is a panel beater by trade but has recently been made redundant. He has a number of outstanding debts which is unable to meet at present. These include a debt to Dave, who runs a wedding car business. George's older daughter, Rosemary, got married recently and George hired a 1930 Rolls Royce Silver Shadow from Dave for her wedding. The bill for $1500 remains unpaid and he has received a letter of demand from Dave.

If Dave needed payment from George to meet his own financial commitments and was prepared to forego up to $300 of the debt if payment was made quickly, and George could borrow up to $1500 from a family member to pay the debt, how could this matter be dealt with using a distributive bargaining approach? In answering the question identify the positions and interests of George and Dave, their BATNAs and any possible ZOPA that may exist. (20 marks)

Question 2

George has discovered that the family member cannot now lend him the money he owes Dave so he has no means of paying Dave at the moment. However he wants to hire Dave's Rolls Royce again for the wedding of his younger daughter, Amanda, who is due to get married in three months' time. George has promised Amanda that he will hire the same vehicle for her wedding as she was really taken with it at her sister's wedding and secured a promise from her father that he would provide the same vehicle for her wedding. Dave's wedding hire car business is not doing very well at the moment. This arises because his most popular vehicle, a 1930 Rolls Royce Silver Shadow, was involved in an accident about 3 weeks ago. The car was badly damaged and unfortunately Dave had not been able to pay his insurance premium on the vehicle so it was uninsured at the time of the accident. The repairs have been estimated at $15,000, comprising $8000 for parts and $7000 for labour. Dave can borrow $8000 for the cost of the parts from Uncle Bob but he does not have sufficient funds to pay for the labour component of the repair quotation.

(a) Taking into account the changed circumstances, how could this matter now be resolved using an integrative negotiation approach? (10 marks)

(b) If you were asked to mediate this matter, what process would you adopt to assist in its resolution? (10 marks)

(c) Under what circumstances would mediation be appropriate for resolving this and why? (10 marks)