Fair deal
Fair deal is a deal that has fair market value. A fair market value means that assessment was done through objective criteria. To be sure criteria are deifinied objectively, there are two ways of tactics[1]:
- Working together with other parties and identifying together objective criteria, then reaching the agreement how much these criteria are going to be fullfilled in ongoing negotiations,
- Multiple market valuations is second tactic, it is assessing situation on many markets and defining criteria based on them, then starting negotiations.
Fair deal is basic assumption of Fair Trade[2]. When an employee feels that he receives fair deal, it is more probable he will perform above minimum expectations[3]. During negotiations fair deal might be perspected as win-win situation[4].
Fair deal failures
Fair deal and negotiations itself might not be reached due to two main scenarios[5]:
- Exercising power tactics. First scenario is that the negotiator does not believe in claims of counterpart and there is no willigness to increase the offer or reduce demands. Here there is big risk of impasse which will not finalise the deal fairly.
- Pragmatic (relationship) approach. Due to concerns about loosing reputation, relationship, some performance or moral discomfort negotiations are made in soft way. Here values of arguments from both sides might not be used, so risk of failure is achieving fair deal is also considered.
In the core of fair deal stays assumption of social concept of cooperation. For example, that the negotiator takes perspective of second party into account. In the opposite of fair deal stays the individual rationality - the negotiator is focused only on reaching his goal. When negotiator focuses only on his individual arguments, not letting negotiations to start, he risks impasse and eventually reaching any deal. Korobkin R. presents research of emotional background of negotiations when respondents were greatly refusing deals perspected as not fair. Moreover, they still refused them, even if that decision was costly for them. The point which means that negotiations are unfair is when one of parties is using lie. Although, definition of unfair negotiations is quite easy to describe, definition of fairness is much more complex as it depends on culture, sense of morality or opinions of negotiators.
Author: Dominika Zaich
Examples of Fair deal
- *A business contract that is negotiated between two parties, where the terms are based on the value of the goods or services being exchanged and are agreed upon by both parties.
- *A real estate transaction between a buyer and seller in which each party has an equal understanding of the value of the property and the terms of the agreement.
- *A car purchase in which the buyer and seller agree on a price based on the condition and value of the car.
- *An agreement between two companies for the exchange of goods or services, where the terms are based on the value of the goods or services and both parties agree to the terms.
Advantages of Fair deal
Fair deal provides numerous advantages. Firstly, it allows both parties involved in the transaction to reach an agreement that is mutually beneficial. Secondly, it ensures that both parties are being treated fairly, as the market value of the goods or services is being determined objectively. Thirdly, it provides stability in the marketplace, as fair market values are based on a range of reliable sources. Fourthly, it helps to eliminate any potential disputes between the parties, as both sides can trust that the transaction is being conducted fairly. Finally, it helps to ensure that the goods and services being exchanged are of good quality, as the market value has been determined objectively.
Limitations of Fair deal
A fair deal is a transaction that is fair for both parties involved and is based on the fair market value of the goods or services being exchanged. However, there are some limitations to this concept:
- It is important to understand the local market, as there may be different values placed on items or services in different areas. This can make it difficult to determine a fair market value.
- It is often difficult to assess the true value of something, as it is subjective. This can lead to discrepancies in what is considered a fair deal.
- Fair deals can also be affected by external factors, such as economic conditions, supply and demand, and regulations.
- Additionally, if the buyer or seller is not knowledgeable about the item or service being exchanged, this can make it difficult to determine a fair deal.
- Finally, if there is a lack of competition, this can lead to one party taking advantage of the other, making it hard to ensure that the deal is fair.
A fair deal is a transaction that is considered to have fair market value, meaning that the assessment of the deal is conducted using objective criteria. There are several approaches used to ensure that the criteria used to assess a fair deal are objective. These approaches include:
- Evidence-Based Methodology: This approach involves using evidence-based research to determine the fair market value of a transaction. This includes gathering data from reliable sources such as market studies, surveys, and industry trends, and using this information to evaluate the deal.
- Benchmarking: This approach involves comparing the market value of a transaction with similar transactions in the same industry or sector. This allows for a more accurate comparison of the deal and can help identify any discrepancies.
- Risk Analysis: This approach involves assessing the risks associated with a transaction and comparing them to the potential returns. This allows for a more accurate evaluation of the market value of the deal.
In conclusion, there are several approaches that can be used to ensure that the criteria used to assess a fair deal are objective. These approaches include evidence-based methodology, benchmarking, and risk analysis. By using these approaches, it is possible to assess the market value of a transaction accurately and ensure that the deal is fair.
Footnotes
| Fair deal — recommended articles |
| Material misrepresentation — Vendor analysis — Sales techniques — Collateral information — Commercial value — Fair price — Compromise — Placement fee — Gharar |
References
- Isn’t it time you got a fair deal?(2018), Annual Report 2018, East End Fair Finance Limited (trading name Fair Finance), Great Britain
- Galluccio M. (2014), Handbook of International Negotiation: Interpersonal, Intercultural, and Diplomatic Perspectives, Springer
- Korobkin R. (2014), Negotiation: Theory and Strategy. Aspen Casebook Series, Wolters Kluwer Law & Business
- Krier J-M., (2007), Fair Trade 2007: new facts and figures from an ongoing success story. A report on Fair Trade in 33 consumer countries, DAWS - Dutch Association of Worldshops, Netherlands
- Levine D. I. (2002), How New is the "New Employment Contract"?: Evidence from North American Pay Practices, W.E. Upjohn Institute for Employment Research
- Manivong V., Sonethavixay S., Wongpit P., Vagneron I. (2016), Fair deal or ordeal? Enquiry into the sustainability of commercial banana production in the Lao PDR in "Agri-chains and sustainable development. Abstract Book", France
- Sirgy M. J. (2014), Real Estate Marketing: Strategy, Personal Selling, Negotiation, Management, and Ethics, Routledge, United Kingdom
