A juvenile red dragon? Junior got kicked out of daddy's cave early, didn't he?
Sure, he'll be arrogant, but he's still just a kid. Hell, he doesn't even have 2nd level spells, attained damage reduction, or even grown significantly bigger than a horse yet. More importantly, he isn't stupid. A 9th level party should be fully capable of killing it; it won't be fun for them, but they can pull it off, possibly even without a causualty. If the dragon is able to figure out that the party can take it, it really won't be that interested in combat.
Which I guess is where Bluff, Intimidate, Sense Motive, and Diplomacy come in. Since it'll have about a +25 to Diplomacy (after synergy bonuses are counted in), it should be able to beat the Face fairly consistently on opposed diplomacy; for that matter, Junior will have the upper-hand in nearly all opposed skill checks unless the Face has some interesting magic to back up his talking.
Go ahead and have it bargain with them. It'd be a lot like making a pact with a Balor (albeit a very inexperienced one, and presumably with no soul-loss involved); if the Face blows it, they could well wind up being far worse off than they would be if they just went and killed the thing.
'Course, if Junior pushes his luck, the party might decide to go ahead and just kill him anyways. If the PCs know that they're going to go talk to a red dragon, they'd be idiots not to prep to take him on.