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Ch.2 Formation and authority of agents, Formation III: Arts 2.1.15–2.1.16—Negotiations, Art.2.1.15 »

Isabel Zuloaga Rios
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary focuses on Article 2.1.15 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning negotiations in bad faith. Art 2.1.15 establishes liability for pre-contractual conduct in general terms. It stipulates that a party is free to negotiate and is not liable for failure to reach an agreement. However, a party who negotiates or breaks off negotiations in bad faith is liable for the losses caused to the other party. In particular, it is bad faith for a party to enter into or continue negotiations when intending not to reach an agreement with the other party. This commentary also discusses the consequences of failure to observe the principle of good faith and fair dealing, with particular emphasis on damages and the right to request performance of the obligation to negotiate in good faith, along with exclusion or limitation of liability and burden of proof.

Ch.2 Formation and authority of agents, Formation III: Arts 2.1.15–2.1.16—Negotiations, Art.2.1.16 »

Isabel Zuloaga Rios
From: Commentary on the UNIDROIT Principles of International Commercial Contracts (PICC) (2nd Edition)
Edited By: Stefan Vogenauer
This commentary focuses on Article 2.1.16 of the UNIDROIT Principles of International Commercial Contracts (PICC) concerning duty of confidentiality. Art 2.1.16 deals with the disclosure of sensitive orr confidential information by one or both parties in relation to the transaction and the potential use (or misuse) that the other party can make of such information, recognizing that a duty of confidentiality may arise and that its breach will entail liability. Where appropriate, the remedy for breach of that duty may include compensation based on the benefit received by the other party. In this sense, Art 2.1.16 is consistent with other instruments for the harmonization of contract law or private law. This commentary also discusses the consequences of breaches of the duty of confidentiality and the burden of proof relating to such breach of duty.