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Title: The concept of good faith and the failed negotiations : 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.
Author: Korotana, Mohammed Shabir Blahi.
ISNI:       0000 0001 3601 9254
Awarding Body: London School of Economics and Political Science (University of London)
Current Institution: London School of Economics and Political Science (University of London)
Date of Award: 1994
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This thesis deals with the concept of good faith and the failed negotiations. It is a comparative and analytical study which comprises of the analysis of the rules of three legal systems namely English law, American law and the U.J. Convention on International Sale of Goods. The notion of good faith is similar to the doctrine of cu2pa-icontra. bendo in civil law. This means that damages are recoverable against the party whose 'blameworthy conduct' during negotiations for a contract has caused it to be invalid or prevented its completion. It is a general phenomenon that there is no general duty to negotiate in good faith in English and American law. Relief for bad faith negotiations is available only after the negotiations have resulted in a contract, where a party's conduct during negotiations has caused it to be invalid. This situation provides adequate remedies under the established concepts e.g. fraud, misrepresentation, duress, undue influence and unequal bargaining power. However, this study deals only with the situation where the negotiations fail to result in a contract, because of the bad faith behaviour of either of the parties during the negotiations. The research suggests that in such a situation relief may also be available through the various notions of good faith applicable during the negotiating stage, i.e. equitable estoppels, proprietary estoppel, promissory estoppel, fraud and misrepresentation in the context of the law of tort, restitution and implied-in-fact contract. Under the American law it is comparatively easier to persue these goals because of the acceptability of the notions of contract to contract, contract to negotiate and the unified theory of estoppel, whereas English law is still unwilling to accept these ideas. Under the doctrine of equitable estoppel obligations may be created 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. The rationale behind the doctrine of promissory estoppel is similar to that of proprietary estoppel. Both are equitable estoppels. Therefore, it has been argued that there is not any logical or practical reason why promissory estoppel should not also be capable of creating a cause of action. Such a unified concept of estoppel would not cause the demise of the bargain theory. Consideration will still remain an essential ingredient in a contract; but alongwith this a new unified theory of estoppel may be introduced to deal with those cases where bargain theory does not apply. Thus, the creation of a cause of action on the basis of promissory estoppel would merely be an addition to the existing bargain theory. This argument has been accepted by some American courts and the other common law countries e.g. Australia, Canada and India. English law, particularly in lower courts, has also tempted some advances in this direction. The U.L Convention does not generally obligates the parties to negotiate in good faith, Article 7(1) states that Nj the interpretation of this Convention regard is to be had to ... the observance of good faith .... However, Article 16(2) like the Restatement (Second) of the Contract incorporates the notion of promissory estoppel with a wider scope of its application. It seems that Article 16(2) may be a useful tool in the context of duty to negotiate in good faith. This study concludes that although English and American law provide some notions 1 of good faith, it is advisable for these systems to introduce either a unified theory of estoppel or a general principle of good faith negotiations (Culpa-ln-Contrabendo) which would achieve a higher standard of behaviour from the parties.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Law