Pre-contractual Liability; terms of realization and compensable losses

Abstract

The period that the parties intentionally communicate with each other tomake a contract as a final draft or ignore it, is called pre-contractual period.In this period, parties negotiate together on the terms of future contract anduse their most endeavors till to reach the final point i.e. making the contract.It may be situations which one of the parties has been incurred some costs atthis period, while another party closes the negotiations unilaterally. Theprinciple of freedom of contract has the consequence of acceptance of precontractualrisks by the parties. However, sometimes damaged person mayfind compensation right and the other party is obliged to compensate on thebasis of special reasons. Liability to compensate for such losses will becalled pre-contractual liability. Nowadays, pre-contractual liability has beenconsidered by legal system of some countries like France.

Keywords

• pre-contractual period
• preliminary agreements
• pre-contractual liability
• reliance damages