Sure, of course. Usually the set-up was that the PCs didn't know if it was a bad guy or not, so they had to be cautious.
Instance #1: The are hunting for someone they *think*, from other clues, may have killed their contact, but they can't be certain...only circumstantial evidence points to this person, and they can't even be sure that the killing wasn't justified in some way. Thus, when they actually track this person down, a conversation (rather than melee) breaks out. Of course, that one eventaully lead to a fight that took down one of the PCs before they routed the bad guy and forced him to flee for his life.
Instance #2: The PCs are investigating a disturbance along a river when a huge creature swims up, emerges from the water, and yells at them. I show the PCs a picture of a monster they had never seen before (ormyrr, 2nd edition picture) and they have no idea whether to fight, flee, or negotiate. In this case, the ormyrr actual offers them a reward to track down the nasty kobols that have been disturbing the apiaries he has been cultivating.
So in general, it works best for me when the PCs don't know if they are facing friend or foe.