general duty of precontractual good faith,30 depends on what he knew or could know about the relevance of the information for the other party. It should be remembered, however, that a recent case (CBB/JPO) has raised some doubt as to whether the Hoge Raad still recognises the ‘second stage’.31

Norway

There are several possible reasons for a claim against A.

The initial approach is to examine whether a contract has been agreed upon with respect to the work already carried out, that is, to part of the work only. This can be called a ‘partial contract’.32 If the parties have explicitly entered into such a partial contract, which is not uncommon, the question is straightforward. However, in case law there has been a tendency to presume the existence of such a partial contract. This rationale for claiming damages has a special significance in view of precontractual liability, partly because a specific basis for liability for compensatory damages (such as bad faith) is not required, and partly because partial, and not full, compensation, is paid.

If A has asked B to do the preparatory work, the basis for argument would be that B as a business person has the right to regular payment for the work. If, on the other hand, the work has been carried out on B’s own initiative, in the expectation of being awarded the contract, the argument is reversed. The risk of the work being wasted rests, naturally, with B. The facts do not, however, describe the situation in detail, and it is therefore difficult to arrive at a definite conclusion. An intermediate situation arises in the case where B, more or less on his own initiative, has commenced preparatory work, and has allowed A to derive advantage from it during the negotiation period. Is this sufficient reason to claim for unjust enrichment? Norwegian law has not developed a doctrine of unjust enrichment. Any answer to the problems mentioned above will therefore be somewhat uncertain. However, the basis must be such that if B wittingly gives A access to the material he is working on during the negotiation period, this does not in itself constitute the right to claim against A.

If no partial agreement is present, the question of precontractual liability applies in its purest form. On the facts as stated, it is doubtful whether A would be responsible on the basis of precontractual liability.

30HR 15 Nov. 1957 (Baris/Riezenkamp), NJ 1958, 67, note Rutten.

31See the Dutch report on case 1. 32 Simonsen, Precontractual Liability, p. 399ff.

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According to Norwegian law, there are certainly no prohibitions against entering into parallel negotiations.33 On the facts given, there are no indications that A has misled B into believing that the negotiations were exclusive. The question is, however, whether A should have informed B that he was also negotiating with others. This would have provided a better opportunity for B to evaluate the risk these negotiations entailed. There is no case law on this question. Negotiating parties have no general duty to inform: specific reasons must exist for there to be such a duty. One such reason is that negotiations are in an advanced state; in other words, that one is approaching the final stage of the negotiation period. Another reason is that the other party has acted in the belief that he would secure the future contract. However, such a situation has to be justified or to arise naturally. That B, because of his policy, has not accepted other work or participated in competition for contracts, and consequently has become particularly vulnerable to a breach of contract, appears to be a situation that he alone should be responsible for. As no contract has been entered into, each party should have realised that the other party also could be involved in negotiations with others. If B had wanted to guard himself against parallel negotiations, the normal procedure would have been to state in a letter of intent a prohibition against such negotiations for a specified period of time. It is doubtful whether A’s awareness of this situation is sufficient to require a duty to inform. If B’s policy on tendering and single-project work is considered a typical personal risk, A’s knowledge of it does not appear to affect the question of liability.

Portugal

In this case A would not be held liable to B. There is no rule in Portuguese law that prevents parties from conducting negotiations with more than one person in order to choose the best contract. This kind of behaviour is considered normal in the negotiations to conclude a contract; it is not contrary to good faith and does not give rise to liability.

33Simonsen, Precontractual Liability, p. 222: ‘Beyond agreed situations it seems fairly clear that no general obligation not to conduct separate negotiations exists. The exploitation of business competition is such a fundamental part of the market mechanism that this right will not normally be considered to limit entry into other

contract negotiations’; G Woxholth, Avtaleinngaelse, ugyldighet og tolkning, p. 210ff.: ‘If a main rule should be established, it would be that parallel negotiations do not involve precontractual liability.’

It would not make any difference if A knew of B’s policy on tendering and single-project work. Only if a lock-out agreement had been concluded between A and B would it be possible to establish the liability of A, which would be based not in precontractual liability but in the contract. The simple fact of A knowing about B’s policy is not sufficient to establish a duty on him to inform B about parallel negotiations, as they are normal in the process of establishing a contract.

Scotland

In Scots law it is generally accepted that parties negotiating a contract are at arm’s length, in the sense that each party is permitted to look to his own interests and comes under no obligation to reveal information to the other or to negotiate in good faith. Positive bad faith may, on the facts of the case, amount to a misrepresentation,34 or may constitute illegal coercion of the other party or exploitation of a special relationship of trust, both of which are prohibited by Scots law. Prior to the moment of agreement, and therefore the point of legal commitment, Scots law holds that parties are in general terms entitled to break off negotiations for whatever reason and to withdraw.

By and large Scottish courts are reluctant to sustain claims for damages based on failed precontractual negotiations.35 There are a number of cases, beginning with Walker v. Milne,36 where recovery for wasted expenditure incurred during contractual negotiations was awarded. Recent interpretation of this line of cases by the Court of Session has held that they are to be seen as cases where recovery was permitted where one party had represented to the other that a binding contract existed but, for reasons of failure to comply with a requirement of form, it did not.37 The availability of this common law remedy for the recovery of wasted expenditure is not affected by the statutory personal bar provided for in Requirements of Writing (Scotland) Act 1995. Where the common law remedy is sought, financial compensation for the wasted costs will be awarded, whereas where statutory personal bar is allowed, enforcement of the contract will occur.

In the present case it seems quite clear that neither party was under the impression that an enforceable agreement existed between them.

34As in case 1.

35H.L. MacQueen, ‘Good Faith in the Scots Law of Contract: an Undisclosed Principle?’ in Forte, Good Faith in Contract and Property.

36(1823) 2 S 379.

37This line of cases is discussed in more detail in relation to case 8.

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That being so, the common law remedy for wasted expenditure outlined above would be unavailable to B. Rather, the misunderstanding revolves around the exclusivity of the negotiations. A does not appear to have knowledge of B’s unusual conditions regarding commissions and tendering. Without being positively informed of B’s conditions, and without these conditions being held customary, there would be no duty of inquiry upon A to find out the terms on which B enters into negotiations. In these circumstances there can be no liability in damages upon A.

If A knew of B’s policy on tendering and single-project work it would suggest that A, in beginning parallel negotiations with C, is thereafter negotiating in bad faith with B. However, in order to found an action in damages, such continued negotiations would have to be argued to be a misrepresentation, whether fraudulent or negligent. This would clearly have to be implied from A’s conduct in continuing the negotiations. The tenability of such a claim is questionable.

Spain

Liability in this case depends on whether A is acting in good faith or not. Considering that it is quite normal to start negotiating with more than one partner in order to select the best offer, A’s conduct cannot be qualified as contrary to good faith nor as an abuse of his right to negotiate. The mere fact of starting negotiations does not by itself constitute a relation of confidence strong enough to impose a duty to inform about parallel negotiations, especially as this is a rather usual fact.38

But generally, according to Spanish legislation, it seems that preliminary works and projects by an architect are to be paid for.39 The work done has therefore to be analysed and qualified: it might be considered as estudio previo (preparatory studies) or even an anteproyecto (pre-project) in the sense of the legislation. But in that case, B has to prove that A told him to do the preliminary work, for which he now asks to be paid; in other words, that there existed a contract concerning the preparatory work that B did. However, if A actually did use the

38Cf. STS, 14 June 1999, RJ 1999\4105; Audiencia Provincial de Valladolid, 9 Nov. 1998, AC 1998\8974.

39Real Decreto 2512/1977, 17 June 1977, RCL 1977\2113; cf. STS, 24 June 1991, RJ 1991\4578.