Good Faith and Pre-Contractual Liability in Commercial Contracts: A Comparative Analysis Between Italian and English Law
38 Pages Posted: 24 Jun 2022
Date Written: May 15, 2022
The principle of good faith has always governed commercial relationships in civil law countries. However, the correct application and limits of this principle have always been debated. This paper firstly analyses how bona fide is interpreted in Italian contract law, concluding that it aims to preserve the utility of contracts and, unlike ordinary diligence, requires both parties to make a reasonable sacrifice to keep the contract alive. Secondly, the correct classification of culpa in contrahendo within the Italian legal framework is discussed. After considering different points of view, the paper discusses the most recent Italian Supreme Court’s decisions, which classify the culpa in contrahendo as a contractual liability arising from “qualified social contact”.
For comparative purposes, the analysis then focuses on the presence of good faith requirements in English law. While recognising the absence of a general principle of bona fide, this paper suggests that many remedies in English law often result in the same outcomes. Also, even if English Courts have consistently refused to affirm a good faith requirement in the negotiation stage of contracts (i.e., a culpa in contrahendo), parties are still protected by other means. In this sense, the paper concludes that the two legal systems are not as different as they appear at first sight and affirming that English law does not require parties to act in good faith could be misleading and not entirely correct.
Keywords: Good Faith, Bona Fide, Pre-contractual Liability, Culpa in Contrahendo, Italian Law, English Law
JEL Classification: K12
Suggested Citation: Suggested Citation