Misconduct in Contract Negotiations as the Basis for Compensation of Losses

Abstract

Article 434.1. of the Civil Code of the Russian Federation considers the misconduct during contract negotiationsto be the basis for civil liability in the form of losses compensation. However, the legislator does not define the concept of bad faith and its place among the constituent elements of the violation of law, which in the Russian legislation, doctrine and legal practice is traditionally recognized as the basis for liability. The purpose of this article is to address the task relevant for the development of Russian civil law and law enforcement practice: to determine the nature of bad faith of the party in the course of or failure of contract negotiations, its relation to culpability as a condition for the traditional civil liability. The research allows to conclude that bad faith of the party during negotiations cannot be an independent condition (element) of an offense. The article gives a critical analysis of the Resolution No. 7 of the Supreme Court Plenum “On application by the courts of certain provisions of the Civil Code on liability for breach of obligations”dated March 24, 2016, in the part of clarification of the rules on the conditions of civil liability under Article 434.1. of the Civil Code.