Liability for Contractual Negotiations in English Law: Looking for the Litmus Test

Abstract

This paper aims at taking a critical look at the current state of English law on liability for contractual negotiations, illustrating the extent to which English law is substantially different than other European legal systems in this respect, and also the extent to which this contrasts with current projects or existing texts of European or International harmonization of Contract law, namely, the EU Commission's Common Frame of Reference (CFR)2, the Principles of European Contract Law (PECL), the UNIDROIT Principles of Contract law and the UN Convention on the Law of International Sales of Goods (CISG).

A very important basic distinction must be made between the case where no Contract results from contractual negotiations and the case where the contractual negotiations result in the formation of a prima facie valid agreement between the parties, or an agreement that is avoided. This paper will concentrate on the former case, which is more interesting as English law is this case still not settled, after a very brief look at the law applicable in the two latter cases.

Keywords: Contractual Negotiations, Pre-contractual Liability, English Law