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Chapter 7 - Potential Consequences of the Reliance Approach in Precontractual Liability for Breaking Off Negotiations for English Law

Published online by Cambridge University Press:  23 January 2020

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Summary

Following on from the findings of the previous chapter, it is necessary to analyse the impact that the reliance approach could have in English law's treatment of liability for breaking off negotiations, particularly in the paradigm case. The chapter will first analyse the current position of English law regarding the treatment and solutions it provides for situations that in the selected jurisdictions would be considered as falling under the label of ‘precontractual liability’. The focus is on whether its piecemeal solutions protect the paradigm case (section I). The chapter will then look at the notion of good faith in the common law world, particularly at English law's rejection of good faith during negotiations. It will argue that from this rejection it does not necessarily follow that the notion of precontractual liability should be also rejected (section II). The chapter will finally argue that the notion of reliance is already present in the piecemeal solutions currently available in English law, and that if the obstacle of good faith were to be removed and the emphasis shifted to the notion of reliance, the idea of liability for breaking off negotiations might face less opposition, exploring how such a liability in the paradigm case could be implemented (section III).

THE CURRENT POSITION OF ENGLISH LAW

Even though English law does not recognise precontractual liability as a general principle of liability, it provides relief in certain factual situations that in the selected jurisdictions would fall under the general principle of precontractual liability. These ‘particular reason[s] for imposing liability’ can be referred to as ‘piecemeal solutions’ that allow for the recovery of losses incurred or benefits unjustly received during the precontractual phase. However, it must be considered whether English law can achieve the same or similar results as the selected jurisdictions, albeit through different techniques and using a different language, in cases of precontractual liability. It will be argued that in many cases it can but that in the paradigm case, 5 English law, as it currently stands, does not provide a remedy.

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Reliance in the Breaking-Off of Contractual Negotiations
Trust and Expectation in a Comparative Perspective
, pp. 183 - 232
Publisher: Intersentia
Print publication year: 2019

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