Introduction
The produce of a contract is often preceded by lengthy negotiations with compromise of both contracting parties. To protect rights of both parties before enter into a contract, regulations related to pre-contractual liability were produced and many country nowadays accept a general duty of pre-contractual good faith . However, based on different social backgrounds and legal systems, judgment also various from country to country when confronted with specific case. The paper will take a simple case of break off negotiations as a fundamental to analyze the possible judgment when UNIDROT PICC, English Law and German Law applies.
Case
In the case, the Nordsee Oil Company from Norwegian(hereinafter referred to as Company N)show great
Specifically speaking, there are no general duty for contracting parties to act in good faith. But there are also several principles to regulate the behaviors of both parties, for instance, the principle of promissory estoppel. As is shown in the case of Cobbe v Yeoman’s Row Management Ltd , the core idea of this principle is that if a party(promisor) made a promise or make a behavior which make the other party (promisee) developed a reasonable reliance of their relationship, “he may be prevented from going back on it of the promisee has act based on the reasonable reliance or the promise”
As for the behavior of breaking off negotiation, it is a right for both parties regardless legal system. However, in exceptional cases, a party may be liable for breaking off negotiations, for they have betrayed a general duty.
Most civil law countries have a restriction on pre-contractual negotiations , but situations varies from country to country. French Law requires that there’s a duty for contracting parties to behave inconsistently. And a party will be liable for the harm he bring to the other party if he break off negotiation in bad faith . The bad faith regulate by French Law, is similar to the legal rules of Germany, which all referred to a situation when break off negotiations all of sudden and without a good reason, yet there is no culpa in contrahendo doctrine in French Law, such duty was classified as tort. Italian Law regulate that there is a general duty to negotiate in good faith, and the good faith is referred to consider the other party’s legitimate interests . As for Netherlands, the rule about general duty is expressed as a “three stage