Precontractual Liability--Focusing on the Establishment of Civil Law System
Date Issued
2008
Date
2008
Author(s)
Yu, Ming-Hui
Abstract
Freedom of contract is composed of two notions, one is that the parties are free to create a binding contract reflecting their free will; another is that the parties are free from obligations so long as binding contract has not been concluded. According to the principle of good faith; however, even in negotiating a party is obligated not to harm the economic interests of the other party. In other words, the victim has the right to claim damages based on his reliance. Resulting from the shortcomings of German tort law, especially for pure economic loss, we have trouble in dealing with those damages occurring in the negotiating process. As far as German Law is concerned, neither contract nor tort reasoning is available to support precontractual liability, and inevitably lead to the creation of an obligation imposed by the law. Notwithstanding the tendency, we should not accept the whole system and approach completely without thinking it over on our own. Above all, we must set up our law system by deciding individual and general provisions of precontractual liability, also make sure that the provisions would bring into full play. In this study, there are two kinds of ways in order to specifically observe the provisions of precontractual liability. One of that is to compare with other civil law systems, such as German, Principles of European Contract Law(PECL), Japan, England and America. The other method is to search and remark those judicial judgments relating to precontractual liability, especially focusing on the provisions the court usually uses and how it uses. Most important of all, the court’s attitude toward the law can reflect the weakness and strictness of our precontractual liability law system. Differing from the fathers’ view of provision §245-1and the opinion of the majority of German scholars, this study tries hard to distinguish between the concept of precontractual liability between the theory of culpa in contrahendo, which Rudolf v. Jhering has set up in 1861. In this study, precontractual liability means that before the contract is formally concluded, if the party’s conduct breach the duty of good faith and induce the other party’s loss, the party is responsible to compensate for the loss. Accordingly, precontractual liability is no longer limited to a fault-based liability. Besides, the nature of the liability is non-independent but tortious. That is to say, precontractual obligation strengthens as negotiation proceeds, however, it is still one of the obligation in tort, not an extra obligation imposed by law. Referring to the law system, there are two sorts of provisions in our recontractual liability system. In this study, we treat individual provisions as §91, §110, §165, §247 and general one as §245-1. Nevertheless, those provisions don’t function well as we expect, the main problem is concerned with the requirements of §245-1. Comparing to the German civil Law §311Ⅱand PECL§2:301, both subjective and objective requirements of §245-1 are too strict to use in cases. Besides, the remedies is not always restricted to reliance damage, particularly the duty to keep other negotiating party’s secrets. For example, there is another remedy as taking back the interests in PECL§2:302. Also, the remedies as to precontractual liability in American law are case by case, even the expectation damage. In regard to the shortcomings of §245-1, the court should be more active in making use of the duty of good faith, as the third article of §245-1. This study manages to find a way out of solving those defects by law reforming and explaining. As to the former, it should go back to the fault-based liability in general provision §245-1, but also get rid of dispensable requirements to make the general clause more flexible. Instead of the negligence rule, the illegality plays an important role in deciding the duty. In accordance with general provision §245-1, extinctive prescription of individual provisions are two years only, not fifteen years. As for the latter, the main question is how to deal with the burden of proof and the duty about using third party to negotiate. In principle, the approach is following the rule of tort due to its nature. At the end, this study contrives to indicate the great relevance between enacting the law and explaining the law. On the one hand, the court as a law-explainer, should make the law’s meaning as clear as possible. On the other hand, even the court has the power to urge the law-maker to reform. According to circumstances in our law system, precontractual liability is the typical instance.
Subjects
precontractual liability
the principle of good faith
an obligation imposedby law
nature of tort
individual provision
general provision
illegality
Type
thesis
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