Withdrawal from Negotiations as the Basis for Pre-Contractual Liability under Russian and Foreign Law

The paper analyzes the criteria for unfair termination of negotiations as a basis for pre-contractual liability.  There are 3 components of unfair interruption of negotiations: 1) entry into negotiations without the intent to conclude an agreement and their subsequent interruption; 2) arbitrary termination of negotiations if the counterparty  has confidence in the conclusion of the contract; 3) untimely notification of the counterparty about withdrawing  from the negotiation process. The author analizes the criteria for unfair breakdown of negotiations. They include  the following: the counterparty has reasonable confidence in the conclusion of the contract and the absence of a  valid reason for terminating business contacts. These criteria are relevant only for the second composition of the  elements of unfair termination of negotiations. To be held liable for entering into negotiations without intending to  conclude an agreement and for the subsequent withdrawal from them, it is not required to establish such criteria, and  in case of untimely notification of the severance of business contacts, it is necessary to establish only one criterion,  namely, the counterparty can reasonably believe in conclusion of the agreement. As a general rule, participants in  pre-contractual relations have the right to conduct parallel negotiations with other persons. This possibility may be  limited by entering into an exclusivity agreement. At the same time, in some cases, entering into parallel negotiations  can be qualified as unfair behavior even without the conclusion of such an agreement.

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