A new approach to precontractual liability for breaking off negotiations: shifting the view from good faith to reliance

This talk will explore the theoretical basis of precontractual liability for the breaking-off of contractual negotiations from a comparative perspective. It will be argued that in civil law jurisdictions (specifically Germany, France and Chile) the true basis of this liability is the notion of ‘reliance’, distinguishing between two dimensions of reliance (‘trust-based’ and ‘expectation-based). It will be observed that in these jurisdictions trust-based reliance merges with the general principle of good faith and that the expectation-dimension of reliance emanates from its trust-dimension. The argument will be made that this innovative theoretical approach to the basis of precontractual liability could have important practical consequences in jurisdictions that do not embrace a general principle of good faith, such as English law. If the analysis is shifted from good faith to the notion of reliance, English law could encompass cases that are currently devoid of protection, without establishing a general principle of precontractual liability.

A sandwich lunch will be available from 12.30. The meeting will begin at 1pm.