On The Liability For Breach Of Precontract

With the increasing use of precontract,the academic community has gradually make more research on it.At present,the academic community has basically reached a consensus on the concept and the independent value of precontract.But there are big controversies about the legal effect and the liability for breach of precontract.This paper is trying to explain the above contents.The content of this paper is as follows:The first chapter is an overview of the precontract,including its concept,nature and establishment requirements.The academic community has basically reached a consensus on its concept and independent value.So this part focuses on the establishment requirements of precontract.There are two elements required for the establishment of precontract-the agreement of the parties and the certainty of the content.The second chapter explains the legal effect of precontract.There are three different views on this question.l."Need to negotiate":the parties only need to fulfill the obligation of negotiation in good faith.2."Need to be contracted":it is not enough for the parties to negotiate in good faith.They also need to fulfill the obligation of final contracting.3."Content decision":the legal effect of the precontract should be decided by its content.When the precontract already has the main terms of the main contract,it has the effect of contracting,otherwise it will only have the effect of negotiation in good faith.There are certain drawbacks in the three theories.The author thinks that the legal effect of precontract is decided by the two establishment requirements of precontract.It may have the effect of negotiation,or have the effect of contracting.The third part explains the liability for breach of precontract.The rights and obligations of the parties in precontract are different under different legal effect theories,which affects its form and content.The general forms of liability in the Contract Law can be applied on precontract.There are four ways to bear the liabilities:l.The deposit liability.The parties can agree on the deposit clause in the precontract,but there is a disagreement on whether the Article 91 of the Guarantee Law can be applied on the precontract,which stipulates that the amount of deposit shall not exceed 20%of the target amount of the main contract.2.The liquidated damage’s liability.It is the same as the deposit liability,which is also an agreed obligation.The parties can agree to apply it on the precontract.3.Continue to perform.There is a big controversy about whether the liability for breach of precontract can include continuing to perform.The author thinks that whether it can be applied on precontract depends on the legal effect of the precontract.4.Damage compensation.Different legal effect doctrines all recognize the damage liability,however,their opinions are different on the scope of damages compensation.Under the"Need to negotiate"theory,scholars think that the scope of damages compensation equals to the loss of reliance interests;and the supporters of"Need to be contracted"theory think that the scope of damages includes performance benefits loss.The conclusion is a summary of the above contents,and hopes that China’s legislation will make more detailed regulations on precontract,to make further guide on the practice and judicial trial of precontract.