Precontractual Liability under the Portuguese, German and French Legal Systems

1 Introduction

On a daily basis, contracts are concluded between natural or legal persons. Therefore, many legal subjects have to enter into the precontractual phase of negotiations that eventually lead to a conclusion or a failure of the treaty. As first outlined by Jhering in 1861¹, the precontractual phase can establish a legal relationship in which precontractual obligations have to be respected. In the following, the precontractual liability under the German, French and Portuguese law will be compared. After an analysis of the historical origin of the precontractual liability in general and the presentation of the historical developments in Germany, France and Portugal, the legal problem, that needs a regulation in the legal orders, will be defined. Furthermore, in the com­parison of the regulatory framework, the similarities and differences of the current legislations in the three states will be examined based on various criteria such as the legal basis, the concrete precontractual duties and the relevance of the good faith. Apart from comparing compensable damages, the legal institutes in those states will be classified. Before summing up the compar­ison of the roots and the legal institute by also including a grid of the main comparative aspects, important cases will be presented to understand the development of the precontractual liability in Germany, France and Portugal.

2 Comparative Analysis

The comparative analysis has a significant role in the legal studies: It demonstrates to the na­tional legal systems in case of deviations between foreign and own regulatory mechanisms advantages and disadvantages of the legal institute. Thereby, it is not only necessary to dis­cuss the wording of the norm, but also to analyze the history and the objectives of the legisla­tor in order to be able to achieve a deeper insight into the interpretation of the rule.

2.1 Historical Origin

The early Roman law did not cover any damages in particular that arose from precontractual relationship; only the non-contractual liability could be applied that was based on dolus ². Later on, the Digesta Iustiniani for instance contained the duty of disclosure for a contractual relationship for the first time.³

The Corpus Iuris Civilis that was developed from 528 to 534 AC implied first ideas on precon-tractual liability: If the seller deceives the buyer in a purchase agreement of sacred and religious lands, the treaty is void and the buyer can use the action of ex empto to claim damages.⁴ Eventually, the General State Laws for the Prussian States from 1794 contained apart from other provisions regarding potential contingencies of precontractual liability,⁵ the provision of Sec. 284 I 5 of the General State Law for the Prussian States for general liability for culpa in contrahendo stating that the regulation that applies to cases of failure to perform duties of a contract shall also apply for the precontractual time.⁶

Nonetheless, it was not until Jhering, who developed the legal concept of culpa in contrahendo in his discourse⁷, that a conceptualization took place: According to him, situations in which the contract was invalid and in which tort liability is not applicable, damages arising from the pre-contractual phase are supposed to be compensated in connection with the contractual relation­ship; this is caused by the fact that the parties have diligence obligations in this phase. From his point of view an invalid or voidable treaty – in comparison to no treaty at all or a valid treaty–, was necessary. Besides, he stated that a treaty does not only consist of the agreed per­formance, but also of the obligation to pay damages, if the treaty is invalid and there is a fault.⁸

2.2 Historical Developments

-Germany- Despite Jhering’s work, the enactment of the German Civil Code (BGB) did not include a provision on culpa in contrahendo even though cases classified by Jhering as culpa in contrahendo cases were enshrined in the BGB.⁹ Nevertheless, they do not present the “classic” culpa in contrahendo liability: The liability of the erring party after contestation was written down in Sec. 122 BGB, the liability of the representative without power was set up in Sec. 179 BGB and the liability of the seller of a non-existent item was specified in Sec. 307 BGB (old version).¹⁰

Nevertheless, courts, that were influenced by publicists¹¹, have expanded the scope of Sec. 242 BGB to include duties in the precontractual stage especially regarding duties of clarification and information and have constituted the obligation to compensate damages based on Sec. 242 BGB.¹² In 2002, during the modernization of the law of obligations, the culpa in contrahendo was enshrined in law into Sec. 311 II BGB.¹³ Nowadays, Sec. 242 BGB has a complementary function to the protection duties in Sec. 241 II BGB.¹⁴

-France- Jhering’s analyses became less important, when other scholars raised similar problems: Raymond Saleilles stated problems that occur because of the termination of contract negotiations and outlined a responsabilit é précontractuelle ¹⁵ ; Henri Mazeaud and Lon Tunc considered this problem to be a question of when the liability temporarily starts¹⁶. Later on, the contractual liability was extended to also include obligations de sécurité for some treaties and the tort liability was supposed to also consist of présomptions de responsabilité for damages occurred through things.¹⁷

Therefore, it was more important to define the nature of the violation: If the violated obligation was a simple obligation g énérale de prudence et diligence, the injured person had to prove the violation; if the violated obligation was an obligation determiné, the violation was assumed.¹⁸ Consequently, around 1940, courts of lower instance ruled that the business owner had a con­tractual obligation de sécurité for the business premises which was seen in cases of violations as a simple obligation générale de prudence et diligence based on a contrat innomé ¹⁹ or on an assumed security obligation²⁰. Thet de Cassation rejected the decisions and remitted the cases based on the assumption that for precontractual relations only tort law is applicable.²¹ After­wards, the Court de Cassation solidified its ruling by continuing to decide that precontractual duties exist, but that they are of tortious nature.²²

During the modernization of civil law in 2016, the culpa in contrahendo was enshrined in Art. 1112 of the French Civil Code (FCC).²³

-Portugal- After Jhering’s work, António Menezes Cordeiro also established that a party has to compensate the negative interest of the other party if the contract was void and the one party has or should have known about the obstacle.²⁴ Guiherme Moreira underlined the obliga­tion to compensate damages if one party sold items for a third party in bad faith.²⁵ Art. 653 of the C ódigo de Seabra of 1867 already provided that the person who makes an offer is responsible for damages if he withdraws before receiving a reply from the other party.²⁶ In 1966, the ideas for the precontractual relationship were included in Art. 227 PCC. ²⁷ It took some time until the courts actually used Art. 227 PCC instead of the regulation of the abuse of rights, but the role of scholars was then significant in shaping the duties of good faith.²⁸

2.3 Definition of the Legal Problem that the National Legal Orders Need to Solve

Based on the classic conception of the law of obligation as a differentiation between contract and tort law, most states have this distinction in their legal order²⁹: Usually, contract law im­poses duties on parties who concluded an agreement: If one party does not comply with the duties and a damage consequently occurred, the other party has to compensate the damage to put the other party in a position as the violation never happened.³⁰ Tort law regulates relations in the community with everyone, without having any agreement between them and is based on the premise that persons are liable for their actions.³¹

Even though, the parties did not conclude a treaty in the precontractual relationship, they still got into the negotiations aiming at making a treaty and do not exactly fall into the group of “relationships to everyone” due to the closer relationship in the negotiations.³² Instead, a mutual reliance between the parties will be established and the parties might suffer damages due to the breach of this reliance. As was also discussed in class, the application of regulations of the tort law leads to inequitable results³³ or fidelity losses are not getting compensated if tort law is not applicable. Therefore, legal orders are in the role of developing a just legal institute to balance out the weaknesses of the tort law to protect the weaker party in the precontractual phase. First of all, the legal institute is supposed to secure the fundamental values of private civil law such as the confidence, the private autonomy and the functioning of the legal transactions but also individual interests such as the protection of assets and the freedom of decisions regarding legal transactions³⁴ ; this is based on the existing expectations regarding honesty, loyalty and business ethics in legal transactions.³⁵ The protection of the functioning of legal transactions protects individual interests in a long term and the individual protection of interests contributes to the stabilization of the legal system.³⁶

Secondly, the trust can be damaged by terminating the negotiations, by violating information duties or by inducing an undesired treaty.³⁷ The compensation of damages should be based on retributive justice to demonstrate the maximal equivalence of the same exchange transactions.³⁸ Lastly, a legal institute needs to be found that respects the self-responsibility of the parties as the limit of the private autonomy and of unlimited confidence in the other party.³⁹ Even though the private exchange of goods needs to be organized by the parties, the legal system has the duty to find means for a fair balance between the parties considering their individual strengths.⁴⁰

2.4 Regulatory Framework

In the context of the regulatory framework, several aspects apart from the legal basis will be examined to display similarities and differences between the legal systems.

2.4.1 Legal Basis

-Germany- In accordance with Sec. 311 II BGB, an obligatory relationship with duties under Sec. 241 II BGB emerge through any arrangements made during, in the lead-up to the agree­ment of contract or similar business relationships: The commencement of contract negotiations according to Sec. 311 II No. 1 BGB is defined as being measures of one party that are supposed to induce the other party to conclude a contract. The initiation of a contract according to Sec. 311 II No. 2 BGB requires a bilateral process in which one party allows the other party to enter into the sphere of influence and the one party does so; both having the possible intention of concluding a contract. For instance, entering the supermarket with the aim to potentially buy something, fulfills the requirements mentioned. Finally, the regulation broadens the scope of application with Sec. 311 II No. 3 BGB in which potential contract partners come into contact with each other.⁴¹

Even though, Sec. 311 II BGB is not referring to the good faith, it is referring to the duties out of Sec. 241 II BGB that includes protection duties such as the duty to respect the rights, objects of legal protection and the interests of the other party.

Apart from violating one of the precontractual duties⁴², a culpable breach according to Sec. 280 I BGB,⁴³ so intentional or negligent culpability, is required pursuant to Sec. 276 BGB, which can be the negligence on the own part or its employee’s part in compliance with Sec. 278 BGB. If a damage caused by the breach of duty occurred, the injured party holds the right to claim compensation⁴⁴ according to Secs. 241 II, 280 I 1 BGB.

It is important to notice that due to the functioning of culpa in contrahendo as a quasi-contract⁴⁵, contractual law rules are applied which avoids disadvantages for the injured party⁴⁶: First of all, a principle has to take the responsibility for culpability of auxiliary persons the way he takes responsibility for his own culpability pursuant to Sec. 278 BGB without having the possibility to exculpate. In tort law, exculpation is possible under Sec. 831 I 2 BGB. Secondly, breaches of duties of the other party reverse the burden of proof, so that the opponent has to prove that he is not culpable for the breach according to Sec. 280 I 2 BGB. Lastly, due to the breach of precontractual duties, the injuring party is liable for primary finan­cial damages that would normally not be compensated in non-contractual obligations except for cases of immoral deliberate damages according to Sec. 826 BGB.⁴⁷ Primary financial damages include all damages that occurred without the intrusion into legally protected absolute right such as life, bodily integrity or property.⁴⁸

Apart from that, third parties can profit from the culpa in contrahendo in accordance with the rules on the “contracts with protective effect to the benefit of third parties”⁴⁹.

[...]

¹ Rudolf v. Jhering, Culpa in contrahendo : oder Schadensersatz bei nichtigen oder nicht zur Perfection gelangten Vertragen (1861), Jahrbucher fur die Dogmatik des heutigen romischen und deutschen Privatrechts IV, Volume 4, Issue 1.

² George Mousourakis, Fundamentals of Roman Private Law (2012), p.198.

³ Digesta Iustiniani: Alan Watson, The Digest of Justinian English-Language Translation (1985), Volume 1, p.29, 1.7.

⁴ Yoav Ben-Dror, The Perennial Ambiguity Of Culpa In Contrahendo (1983), The American Journal of Legal History, Volume 27, Issue 2, pp.142, 159.

⁵ Sylviane Colombo, The Present Differences Between The Civil Law And Common Law Worlds With Regard To Culpa In Contrahendo (1993), Tilburg Foreign Law Review, Volume 2, Issue 4, pp.341, 350; Birke Häcker, Consequences Of Impaired Consent Transfers: A Structural Comparison Of English And German Law (2009) p.95.

⁶ BeckOGK/ Herresthal, 2019, BGB, Sec. 311, Recs 181-182.

⁷ Rudolf v. Jhering, Culpa in contrahendo : oder Schadensersatz bei nichtigen oder nicht zur Perfection gelangten Vertragen (1861), Jahrbucher fur die Dogmatik des heutigen romischen und deutschen Privatrechts IV, Volume 4, Issue 1.

⁸ Yoav Ben-Dror, The Perennial Ambiguity Of Culpa In Contrahendo (1983), The American Journal of Legal History, Volume 27, Issue 2, pp.142, 150.

⁹ BeckOGK/ Herresthal, 2019, BGB, Sec. 311, Rec 183.

¹⁰ BeckOGK/ Herresthal, 2019, BGB, Sec. 311, Rec 183.

¹¹ such as Franz Leonhard, Die Haftung des Verk äufers für sein Verschulden beim Vertragsschluss (1910).

¹² BeckOGK/ Herresthal, 2019, BGB, Sec. 311, Rec 187.

¹³ Gesetz zur Modernisierung des Schuldrechts vom 26. November 2001 (BGBl. 2001 I 3138) (Act on the mod­ernization of the Law of Obligations).

¹⁴ Sebastian Plassmann, Treuwidriges Verhalten bei Formverst ößen (2016), Studien zum Zivilrecht, Volume 21, p.259.

¹⁵ Raymond Saleilles, De la responsabilite precontractuelle. A propos d'une etude nouvelle sur la matiere (1907), Rev.Trim.Dr.Civ.6, Volume 6, p.697ff.

¹⁶ Henri and Léon Mazeaud/André Tunc, Traite theorique et pratique de la responsabilite civile delictuelle et contractuelle (1965), Volume 1, Rec 116 No. 1.

¹⁷ Henri Lalou, Traite pratique de la responsabilite civile (1962), pp.133 ff.

¹⁸ Karl Kreuzer, Culpa in Contrahendo und Verkehrspflichten (1971), p.209.

¹⁹ Trib. civ. Marseille 01/08/1940 Gaz. Pal. 1940, I, 217 (court ruling).

²⁰ Paris 06/30/1958 Gaz.Pal. 1958, II, 348 (349), Seine 06/22/1955 D. 1955, 610 (court rulings).

²¹ Cour de cassation, chambre civile 1, 11/07/1961 and chambre civile 2, 11/19/1964 (court rulings).

²² Cour de cassation, chambre commerciale, 04/07/1998, 95-20.361 and chambre civile 1, 01/06/1998, 95-19.199 (court rulings).

²³ Christian Klein, Die Vertragsrechtsreform in Frankreich (2016), RIW, p.328; Isabelle Beyneix, La n égociation des contrats (2016), RTD Com., Rec 1.

²⁴ Antonio Menezes Cordeiro, Da Boa Fe no Direito Civil (2001), Colecao Teses, pp.531-532.

²⁵ Guilherme Moreira, Instituic ̧oes do Direito Civil Português (1925), Volume 2, pp.664ff.

²⁶ Sara Costa Apostolides, Do dever pre-contratual de informac ̧ao e da sua aplicabilidade na formaçao do con-trato de trabalho (2008), p.29

²⁷ Decreto-Lei n.º 47344, Diário do Governo n.º 274/1966, Série I de 1966-11-25 (decree-law).

²⁸ Sara Costa Apostolides, Do dever pre-contratual de informac ̧ao e da sua aplicabilidade na formaçao do con-trato de trabalho (2008), p. 101.

²⁹ Andrew Robertson, On the Distinction between Contract and Tort (2003), p.1.

³⁰ Andrew Robertson, On the Distinction between Contract and Tort (2003), p.1.

³¹ Nils Jansen, Deliktsrecht: Allgemeines und lex Aquilia (2009), HWB EuP.

³² Reiner Schulze/Pilar Perales Viscasilla, The Formation of Contract (2016) , Europäisches Privatrecht, p. 14.

³³ RG, 09/24/1918, VII 95/18, RGZ 95, 58 (court ruling).

³⁴ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.34.

³⁵ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.44.

³⁶ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.48.

³⁷ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.43.

³⁸ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.29.

³⁹ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.48.

⁴⁰ Małgorzata Wojtas, Die Haftung für culpa in contrahendo in Polen und Deutschland (2017), p.49.

⁴¹ MüKo/ Emmerich, 2019, BGB, Sec. 311, Recs 42-44; BeckOK/ Sutschet, 2020, BGB, Sec. 311, Recs 46, 47.

⁴² See 2.3.2.

⁴³ MüKo/ Emmerich, 2019, BGB, Sec. 311, Rec 203.

⁴⁴ see 2.3.6.

⁴⁵ See 2.4.5; BeckOGK/ Herresthal, 2019, BGB, Sec. 311, Rec 191.

⁴⁶ BeckOK/ Lorenz, 2020, BGB, Sec. § 280, Rec 15.

⁴⁷ BeckOK/ Lorenz, 2020, BGB, Sec. 280, Rec 15.

⁴⁸ Stephan Lorenz, Grundwissen – Zivilrecht: Deliktsrecht – Haftung aus § 823 I BGB (2019), JuS, p.852.

⁴⁹ Stephan Lorenz, Grundwissen – Zivilrecht: Culpa in contrahendo (§ 311 II, III BGB) (2015), JuS, p.401.