عنوان

The concept of good faith and the failed negotiations :

Number

TLets320956

Title Proper

The concept of good faith and the failed negotiations :

General Material Designation

[Thesis]

First Statement of Responsibility

Korotana, Mohammed Shabir Blahi.

Title Proper by Another Author

a comparative study of the rules of the English law, American law and the U.N. Convention on Contracts for the International Sale of Goods.

Name of Publisher, Distributor, etc.

London School of Economics and Political Science (University of London)

Date of Publication, Distribution, etc.

1994

Dissertation or thesis details and type of degree

Ph.D.

Body granting the degree

London School of Economics and Political Science (University of London)

Text preceding or following the note

1994

Text of Note

This thesis deals with the concept of good faith and the failednegotiations. It is a comparative and analytical study whichcomprises of the analysis of the rules of three legal systems namelyEnglish law, American law and the U.J. Convention on International Saleof Goods.The notion of good faith is similar to the doctrine of cu2pa-icontra.bendo in civil law. This means that damages are recoverableagainst the party whose 'blameworthy conduct' during negotiations for acontract has caused it to be invalid or prevented its completion.It is a general phenomenon that there is no general duty tonegotiate in good faith in English and American law. Relief for badfaith negotiations is available only after the negotiations haveresulted in a contract, where a party's conduct during negotiationshas caused it to be invalid. This situation provides adequate remediesunder the established concepts e.g. fraud, misrepresentation, duress,undue influence and unequal bargaining power.However, this study deals only with the situation where thenegotiations fail to result in a contract, because of the bad faithbehaviour of either of the parties during the negotiations. Theresearch suggests that in such a situation relief may also be availablethrough the various notions of good faith applicable during thenegotiating stage, i.e. equitable estoppels, proprietary estoppel,promissory estoppel, fraud and misrepresentation in the context of thelaw of tort, restitution and implied-in-fact contract. Under theAmerican law it is comparatively easier to persue these goals because ofthe acceptability of the notions of contract to contract, contract tonegotiate and the unified theory of estoppel, whereas English law isstill unwilling to accept these ideas.Under the doctrine of equitable estoppel obligations may becreated on the basis of detrimental reliance which may in certain cases be equal to the expectation interest and in the others to the out-ofpocket-expenses, depending upon the circumstances of the case. Therationale behind the doctrine of promissory estoppel is similar to thatof proprietary estoppel. Both are equitable estoppels. Therefore, ithas been argued that there is not any logical or practical reason whypromissory estoppel should not also be capable of creating a cause ofaction.Such a unified concept of estoppel would not cause the demise ofthe bargain theory. Consideration will still remain an essentialingredient in a contract; but alongwith this a new unified theory ofestoppel may be introduced to deal with those cases where bargaintheory does not apply. Thus, the creation of a cause of actionon the basis of promissory estoppel would merely be an addition to theexisting bargain theory. This argument has been accepted by someAmerican courts and the other common law countries e.g. Australia,Canada and India. English law, particularly in lower courts, has alsotempted some advances in this direction.The U.L Convention does not generally obligates the parties tonegotiate in good faith, Article 7(1) states that Nj theinterpretation of this Convention regard is to be had to ... theobservance of good faith .... However, Article 16(2) like theRestatement (Second) of the Contract incorporates the notion ofpromissory estoppel with a wider scope of its application. It seemsthat Article 16(2) may be a useful tool in the context of duty tonegotiate in good faith.This study concludes that although English and American law providesome notions 1 of good faith, it is advisable for these systems tointroduce either a unified theory of estoppel or a general principle ofgood faith negotiations (Culpa-ln-Contrabendo) which would achieve ahigher standard of behaviour from the parties.

Law

Korotana, Mohammed Shabir Blahi.

London School of Economics and Political Science (University of London)

Electronic name

p

[Thesis]

276903

a

Y