Negotiating in Good Faith: Walking Away to BATNA Under the Civil Law

Abstract

Negotiation theories and methods originating in the United States are widely used outside their country of origin, in many cases with no adaptation beyond mere translation. This paper considers whether such a direct transplant of negotiation methods and materials is valid, taking into consideration the difference between the common law’s aleatory theory of contract and the pre-contractual good faith required when negotiating in the civil-law world. In particular, the paper examines the negotiation concept of BATNA, in light of the civil law’s rules on the unjustified breaking-off of negotiations, and concludes with proposed solutions to this problem; including the management of reliance interests and expansion of the concept of Reserve Value to take into account estimated pre-contractual liability.

Keywords: Negotiation, Good Faith, Pre-Contractual Liability, Culpa in Contrahendo, BATNA, Reserve Value, Aleatory Theory of Contract, International Law, Comparative Law