It cannot be agreed with the doctrinal view that negotiating contracts is an actual act of intent to culminate in their legal action, i.e. the conclusion of a contract, which follows by law, without the need to draw up a document or to make separate oral declarations of will if the parties agree on all the provisions. This statement only confirms the bad practice of some Polish entrepreneurs, who conduct negotiations unprofessionally.
Each of the methods of concluding the contract provided for in Polish law (the offer and its acceptance, auction, tender, negotiations) requires the parties to make a declaration of will, in accordance with the principles of their representation. In the case of negotiations, the agreed declarations of intent of the parties to the agreement shall cover all relevant elements of the negotiations.
In case of liability from Article 72(2) KC compensation may not be withdrawn from a contract that has not been completed. However, it should cover all expenditures made in connection with the negotiations, although not directly linked to the agreement itself and the expected benefit resulting from it,
Conditions of responsibility
As per content Article 72(1) KC, if the parties are negotiating with a view to concluding the agreement, the agreement shall be concluded when the parties agree on all its provisions which have been the subject of the negotiations. Simultaneously section 2 that Article provides that a party which has initiated or has conducted negotiations in violation of good manners, in particular without the intention to conclude a contract, is obliged to make make good the damage which the other party suffered by hoping to enter into into a contract.
Conditions for liability provided for in Article 72(2) The KC shall include: opening or conducting negotiations in violation of good manners, injury and a causal link between the party’s behaviour and the resulting injury. This liability should be qualified as a non-reliability liability as only the conduct set out in that provision is the source of the obligation to make good the damage.
Compensation for breach of good morals during negotiations
Compensation due on the basis of Article 72(2) The KC is limited to the negative interest of the contract as it should compensate for the damage suffered by the party as it hoped to conclude the contract.
The damage, which is a normal consequence of starting or conducting negotiations in violation of good manners, covering both actual losses and lost benefits (Article 361(1)(2) KC).
The damage will therefore include, for example, the costs incurred to carry out the negotiations, but not the benefits lost since the agreement under negotiation was not fulfilled or another agreement (which the party could conclude if it had not entered into ineffective negotiations).
The compensation liability concerns actual losses arising, among others, as a result of the costs incurred to prepare for negotiations – namely the costs of expertise, research and research.
In other words, in the case of liability with Article 72(2) KC compensation may not be withdrawn from a contract that has not been completed. It should, however, cover all expenditures made in connection with the negotiations, although not directly linked to the agreement itself and the expected benefit resulting therefrom.
The compensation for the negative (negative) contractual interest should therefore take into account what the party would have had if it had not entered into the contract, rather than what it would have had if the contract had been implemented.
However, it should be pointed out that, even if negotiations are conducted for the conclusion of the Agreement, until its conclusion, neither party is bound by the declarations made. This also applies where such claims have been confirmed by the counterparty. Neither party is obliged to conclude the negotiated agreement.
Declaration by one of the parties to the non-intention to conclude the agreement, despite the agreement of some of its provisions, can only be assessed on the grounds of Article 72(2) KC.
However, if the counterparty resigns, the party to the negotiations will not be able to oblige the other party to the negotiated agreement, regardless of the degree of negotiation and the resulting expectations of the counterparty on the conclusion of the contract.
Written by Maciej Tuszyński
Legal Manager in the Legal Department. Lawyer, member of the District Bar Council in Warsaw, graduate of the Faculty of Law and Administration of the University of Warsaw. He specializes in commercial and civil law law. He has professional experience, which includes litigation and comprehensive legal advice on the day-to-day service of economic operators, in particular commercial law companies. As part of his work at the law firm, his practice focuses on corporate, civil and economic matters.