Pam and Kim are sisters and were very close until about six months ago, when Kim failed to pay Pam the agreed price of $1500 for her 10-year-old Ford Focus car.

Kim had bought the car with every intention of paying for it but had lost her job after falling out with her employer. She has not found a replacement job due to the nasty comments and malicious rumours her former employer has made about her around town.

Relations have deteriorated between the sisters to such an extent that Pam has threatened to take legal action to recover the sum due from her sister.

Pam is going through a difficult period too. She is trying to establish a modelling career and is waiting for her first real assignment. She is becoming frustrated at her lack of opportunity and her financial resources have been steadily depleted to such an extent that she now owes money to several creditors.

Kim has just moved back to live at home because she cannot afford to rent her own flat at the moment due to her lack of employment. She has, however, just received a $1200 rental bond refund, which she could use towards paying Pam for the car.

Pam needs money urgently so as to continue the pursuit of her modelling career and would be prepared to accept the sum of $1000 from Kim, if payment was made immediately.

Question 1

Using the information above how could this matter be resolved using a distributive bargaining approach? Describe this approach and indicate the tactical skills and approaches that the parties could adopt to achieve a successful outcome in the above scenario.

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