Negotiation Definition:

The Superior Court of Pennsylvania, in Werner v Hendricks (1936), held:

"Negotiations are the deliberations which take place between the parties touching a proposed agreement.

"To negotiate is to transact business, to treat with another respecting a purchase and sale, to hold intercourse, to bargain or trade, to conduct communications or conferences. It is that which passes between parties or their agents in the course of or incident to the making of a contract; it is also conversation in arranging terms of contract.

"Negotiation presupposes a mutual interest in the subject matter and merely directing one's attention without further enlisting interest or discussion falls far short of negotiations. The mere offer or solicitation, which meets with prompt refusal or rejection having no effect whatever upon the subsequent purchase of the route, cannot be regarded as negotiations within the meaning of the contract."

In Commercial Union Life Assurance v. John Ingle Insurance Group, Justice Weiler of the Ontario Court of Appeal accepted this definition of negotiation, at ¶49:

"... arrangement through communication or agreement through discussion. It need not contain an element of bargaining."

In Aronovitch & Leipsic v. Berney, Justice Beard adopted these words to judicially define negotiation:

"A consensual bargaining process in which the parties attempt to reach agreement on a disputed or potentially disputed matter.

"Negotiation usually involves complete autonomy for the parties involved, without the intervention of third parties. Dealings conducted between two or more parties for the purpose of reaching an understanding."

REFERENCES:

• Aronovitch & Leipsic Ltd. et al. v. Berney et al., 2005 MBQB 180
• Commercial Union Life Assurance Co. of Canada v. John Ingle Insurance Group Inc., 217 DLR (4th) 178 (2002)
• Werner v Hendricks, 182 A. 748