Culpa in contrahendo

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“Culpa in contrahendo” — literally “the failure to select Jordan Henderson in the Euros” or, failing that, the “fault in conclusion of a contract”, or for the more plainly minded, “negotiating in bad faith” is, we gather, a key concept in the civil law of contracts (you know, that odd Continental way of sorting out arguments) in which the positive law of places like Germany sees a clear duty when negotiating — so before there is a contract to sue under — not to mislead or induce one’s counterparty to act to its detriment before the contract is concluded.

Pedants like to observe there is no common law equivalent, and while that may literally be true, in practice it is stretching things a little. Misrepresentation, the basic principles of equity and restitution, and the constructive imaginations of common law judges thoughout the centuries will ensure the plain common law is applied in such a way as to ensure little old ladies, Welsh hoteliers etc., don’t get the sharp end of the stick, mean that in practice the fellow who tries to insist upon, or deny, rights and obligations created thorough her own nefarious conduct, can expect fairly short treatment.

We have seen it argued, for example — in the context of a simple NDA of all places — that a clause disclaiming “the obligation to enter into a further agreement” — to you and me known as an unenforceable “agreement to agree” and quite unneeding of such protection in the common law — might come in handy in a civil law contract where the principle of culpa in contrahendo applies. But — and knowing squarely nothing about the civil law precepts beyond what one can glean from Wikipedia — this strikes us as a pretty silly argument. Firstly, you either have a contract or you don’t. The use — or risk? — of contrahendo to contractual negotiations that are never concluded cannot be solved by a clause in a contract no-one signs.

Nor, it seems to us, if the point of contrahendo is to undo the unjust vicissitudes brought on by an oppressive contract one was hoodwinked into signing, sticking something in that oppressive contract is hardly going to help.