Pre-contractual liability : comparative perspectives

Abstract

The conclusion of a contract may be preceded by negotiations during which the parties discuss and specify the modalities of the agreement which they hope to conclude and by which they would, eventually, be bound. Especially in commercial dealings, negotiations may involve complex financial, technical and commercial issues and considerable expenses. During negotiations every party finds itself in the situation of wanting to have the liberty withdraw from negotiations if it feels fit. Yet, when the exercise of this liberty occurs this can cause damage to the other party by depriving it of the benefits expected from the contract and by causing loss of the expenses already incurred. In modern most modern legal systems the law intervenes in pre-contractual relations in order to harmonise these contradictory preoccupations. The method varies from one jurisdiction to another, yet all have a similar if not common aim; that of protecting the negotiating parties' legitimate interests requiring standards of correct conduct during the pre-contractual phase. Violating such standards of conduct could entail a pre-contractual liability. The first chapter of this thesis deals with the development of pre-contractual liability, the origins of which have been traced to Roman Law. Particular attention is then devoted to the development of this notion in modern times, departing from the work of German jurist Rudolph von Ihering. This jurist's work influenced the development of pre-contractual liability across continental Europe. The development of this notion in Italian and French law is also analysed as is the position in Maltese law. Maltese law on pre-contractual liability has hereto been considered to be a grey areas but its existence cannot be denied. On the contrary, local jurisprudence indicates otherwise. The second chapter deals with aspects related to the law of contract that are pertinent to the study of pre-contractual liability. The moment of conclusion of a contract is established in order to pin-point the outer limit of pre-contractual liability. The development of the traditional notion of freedom to contract and the teoria della volonta are discussed. This chapter also deals with pre-contracts and whether these may be considered as a source of pre-contractual liability. In the third chapter the current approach to pre-contractual liability of the three jurisdictions under examination is discussed. In Italy and France such liability arises extra-contractually. It is argued that this is also the position in Maltese law. The role of good faith in negotiations is analysed and the law of tort and quasi-contracts are discussed as possible bases for pre-contractual liability in Maltese law. The fourth and final chapter deals a fundamental question that arises: What remedy does a person have if he has suffered damages pre-contractually. This chapter tackles this matter and deals particularly with the quantification of damages in cases of pre-contractual liability.