Damages for Groundless Refusal to Continue Negotiations. The Role of Good Faith

This work is dedicated to the issue of sudden and unjustified termination of negotiations on the conclusion of the contract under circumstances such that other party could not reasonably expect this. In particular, the author analyzes approaches to the nature of pre-contractual liability, foreign approaches to unjustified termination of negotiations, Russian legislation and judicial practice of subparagraph 2 of paragraph 2 of Article 434.1 of the Civil Code of the Russian Federation. Finally, it was concluded that a sudden and unjustified termination of negotiations should be considered when one of the following conditions took place in the case: the last stage of the negotiation process, the agreement of the essential terms of the contract, the duration of the negotiations, previous contractual relations between the parties, the person's assurances on the intention to conclude a contract, the fulfillment of actions that clearly convince the party of the person's intention to conclude a contract. Moreover, the special test was created to determine the reasonable expectations of a person basing on these conditions. The conclusions could have not only theoretical, but also practical significance.