Good faith in European preliminary agreements: should you consider a good faith clause when drafting preliminary agreements?

Abstract

This thesis deals with precontractual liability in Europe and more specifically focuses on the duty of acting in good faith as it is present in certain jurisdictions under the chapeau of culpa in contrahendo. It concentrates on the question of whether parties should consider inserting such a duty in their preliminary agreement. Since this thesis is library -based, the question will be answered mainly with the help of literature from “anti-good faith” -jurisdictions (commonlaw) such as the UK (subsidiarily the US). This will allow the detection of flaws supposedly inherent to such a duty. These insights, together with the advantages drawn from literature, case-law, and punctually inserted L&E elements, aim to contribute to the answer. Prima facie one might think that the most relevant factor of whether parties might consider such a clause is whether they come from different legal backgrounds, since this is the factor that constitutes the starting point of this thesis. Notwithstanding, many more elements influence the decision, some describe the positive elements of the good faith approach in general and some more specifically focus on the clause itself, especially its wording, the parties’ goals regarding the preliminary agreement, and its recognition and enforcement. This thesis argues in favour of the implementation of a duty to negotiate in good faith in preliminary agreements. However, this thesis only selectively addresses issues surrounding the duty to negotiate in good faith, and thus does not constitute a complete analysis of the subject. Lastly, since the common law jurisdictions are not completely averse to the good faith aspect anymore, this thesis should furthermore provide access to the culpa in contrahendo-doctrine, and should also deliver a more personalised and specific approach by including the duty to negotiate in good faith through preliminary agreements.