Pre-contractual liability, or if one prefers, culpa in contrahendo, is a topic that has long intrigued comparative lawyers. The failed contract negotiations problem can be described as follows. Where negotiations fail due to the fault of one party, what, if any, liability arises and what remedy can the innocent party claim—lost expenses; loss of expectation of contractual benefit; or formation of some kind of contract? It raises therefore both questions as to the form liability should take and what remedies can and should arise. While recovery of the negative interest (expenses) is less controversial, depending on the stage that had been reached in the negotiations, recovery of the innocent party’s positive interest (the expected benefits under the negotiated contract—although Hick prefers the term ‘performance interest’ (13)) - potentially conflicts with the concept of freedom of contract which asserts that parties have a freedom not to contract. Cartwright and Hesselink see it as a question of drawing a line between a party’s freedom to break off negotiations, and any duties owed by one party to the other during the negotiation (Precontractual Liability in European Private Law (CUP 2008) 451). The freedom to break off precontractual negotiations (subject to good faith) is expressly recognised in the French and Belgian recodifications at Article 1112 (French Civil Code) and Article 5.15 (Belgian Civil Code). How, then, should the risk of failed contract negotiations be allocated?

In this fascinating study, Tom Hick draws on five jurisdictions (Belgium, France, Germany, Italy and the Netherlands) with reference to soft law sources such as UNIDROIT, the Draft Common Frame of Reference and Principles of European Contract Law (PECL). The book has three substantive parts: Part I (Structure of Liability for Contract Negotiations and Obligations to Contract); Part II (Liability for Contract Negotiations); and Part III (Obligation to Negotiate or to Contract). Hick seeks to identify a European structure of liability for failed contract negotiations (a term he prefers over that of ‘pre-contractual liability’ which he argues is confusing in that it includes preliminary contracts). The law does appear to differ in the jurisdictions studied. German law resorts to contract law given the limits of section 823 Bürgerliches Gesetzbuch (BGB) (now section 311(2) BGB). Recent French and Belgian codal law reform has introduced specific provisions (Article 1112 (French Civil Code); Article 5.15 (Belgian Civil Code)). Dutch law relies on good faith. The 1942 Italian specific codal provision (Article 1337) manifests both Germanic and French influences. Hick seeks to identify the underlying structural elements, values and core rules of liability. His analysis is critical and challenges existing legal positions.

Hick argues that there is a structure of liability for contract negotiations that is common to all legal systems, that is, conduct-based liability resting on either contract law (Germany) or tort law (other systems studied). Yet, he argues, given that freedom of contract reasoning permits parties not to contract, something more than breaking off negotiations will be needed to trigger liability. This leads to Hick’s ‘two-pronged approach’. This requires, in addition to a general liability framework that allows compensation for pure economic loss in either contract or tort law, a specific legal basis for making the breaking-off of contract negotiations ‘unlawful’ in the face of freedom of contract arguments.

This extra element, Hick argues, derives from a presumption, albeit one that is implicit, in legal systems that there is an obligation to contract or at least to negotiate:

He argues that all systems adopt this two-pronged structure. Examining the cases, as Hick does in Part II, reveals that they do demand some form of fault beyond simply breaking off the negotiations. The French and Belgian cases cited regard fault to be satisfied by a party unilaterally breaking off negotiations ‘abruptly’, ‘at a very late/advanced stage’ or ‘abusively’ or, for the Dutch, ‘contrary to good faith’. Hick argues that liability based on deceiving legitimate expectations can easily be explained as based on an obligation to negotiate or to contract, albeit without being explicitly stated by the law (98).

The classic example of misconduct during negotiations is that of starting negotiations without any intention of concluding a contract (see, e.g. 2:301 PECL). The idea is that the wrong, and Hick rather idealistically favours a ‘single reproached fault’ for reasons of clarity (in reality, the facts tend to be messier than this), triggers the claim for compensation. Again, Hick’s desire for clarity leads him to challenge the current understanding of recoverable harm in terms of positive and negative interests which he regards as creating more confusion than clarification (he is particularly critical of the new Article 5.17 of the Belgian Civil Code). His favoured approach is that:

It perhaps goes without saying that this is controversial. Hick is critical, not only of the recent Belgian reforms, but also of case-law and academic commentary across the five jurisdictions studied. The enforcement of the obligations discussed in Part III presupposes a willingness to accept judicial intervention, although he does propose a new approach based on the Obliegenheit concept taken from German insurance law that encourages parties to collaborate in reaching an agreement voluntarily rather than having one imposed upon them. The pursuit of structural neatness does, inevitably, come at the expense of the complexity of the great variety of situations in which pre-contractual liability arises. Hick’s criticism that some codifications have gone beyond what is necessary for a system of pre-contractual liability and wrongly, in his view, do not stick to the necessary minimum which runs the risk of distorting or complicating matters, might also be challenged (37). While it is technically correct to say that general tort law clauses can be interpreted to deal with pre-contractual liability, it is necessary to reflect on the wider aims of the reform process. A key objective of the French and Belgian reforms of their Civil Codes was to codify case-law developments and bring such law back within the confines of the Civil Code. Such codification may not be ‘necessary’ in a purely academic sense, but in terms of policy, reasserts the primacy of the Civil Code as a source of law.

Nevertheless, this is a fascinating work of scholarship which explores ideas and seeks through intensive research of the five jurisdictions studied to find a pathway to liability that meets both normative and practical needs. Common lawyers may be somewhat disappointed that the author’s focus on the scholarship of the five civil law jurisdictions meant that he was unable to reflect on broader commentary in UK and US journals such as the excellent J. Dietrich, ‘Classifying Precontractual Liability: A Comparative Analysis’ (2001) 21 Legal Studies 153 and, dare I say it, P. Giliker, ‘A Role For Tort In Pre-Contractual Negotiations? An Examination Of English, French, And Canadian Law’ (2003) 52 ICLQ 969. Classic US scholarship such as E.A. Farnsworth, ‘Pre-contractual Liability and Preliminary Agreements: Failed Dealing and Failed Negotiations’ (1987) 87 Columbia Law Review 217 and F. Kessler and E. Fine, ‘Culpa in contrahendo, Bargaining in Good Faith, and Freedom of Contract: A Comparative Study’ (1964) 77 Harvard Law Review, 401 is also missing, although it is good to see the author refer to Isabel Zuloaga’s excellent Reliance in the Breaking-Off of Contractual Negotiations (Intersentia 2019), reviewed in this journal, albeit disagreeing with her approach. These works bring in an alternative perspective, notably a common law tort of negligence policed by the need to establish a duty of care, a narrower conception of fraud, and a stronger advocacy of freedom from contract and the role to be played by risk-based analysis, which, it is suggested, might have enriched the author’s analysis.

The author should be proud of his rigorous survey of pre-contractual liability in the five jurisdictions in question and his proposal for a more structured approach for engaging with liability for failed negotiations. He engages well with scholarship—notably German and Italian—with which many English-speaking scholars will be unfamiliar. He readily concedes his structure relies on identifying ‘concealed’ reasoning, but his aim is a laudable one: to explain existing law in a clearer and more coherent way. The book does betray its origins as a doctoral thesis—there is, in places, unnecessary detail which many readers would be unlikely to require—but it is nevertheless a valiant attempt to identify a common structure that unites systems that seem on their face to adopt different approaches to liability. The author is a very promising scholar and one whose future work should be monitored with interest.

For the global reader, it would be interesting to see Hick reflect in future work on the extent to which the structure he identifies would operate in other contexts, notably that of the common law. As Cartwright and Hesselink note, ‘[t]he strongest view against the model of negotiations as constituting a legally protected relationship is found within the common law jurisdictions, where there is a marked reluctance to attribute legal significance to the precontractual phase’ (above, 451). This is an opportunity perhaps for another day and one that does not detract from a thoughtful and well researched monograph that provides insights into the complex law relating to liability for failed negotiations in five key civil law jurisdictions.