Abstract
The jurisprudential and judicial legal trend tends to apply the principle of good faith at the pre-contracting phase as one of the most substantial principles governing this phase, since it is inconceivable that the parties are to negotiate in bad faith, and then must implement the contract in good faith, in accordance with the traditional legal rule that “fraud spoils everything it touches”. However, the Palestinian legislature has ignored enacting legal provisions obliging the parties to abide by the principle of good faith in the pre-contracting phase causing a legislative deficiency in the legislative remedies of the subject of good faith in the pre-contracting phase. This paper seeks to prove that replacing a provision that requires good faith in negotiations with the provisions of tort liability causes many legal problems. To prove this, the legal provisions should be analysed which would also include determining the definition of the principle of good faith, and the function of that principle in achieving contractual equilibrium and the legal basis for this principle at the stage of negotiation which should also be analysed. Moreover, a comparative analytical approach with the French civil code is used to illustrate the Palestinian legislative deficiencies and the need to legislate a legal article which obligates the negotiating parties to behave in good faith, as this has become an unavoidable reality that should be dealt with to contribute to the stability of civil and commercial transactions. As such, the legal article should also specify the compensation to be claimed.
Highlights
The importance of negotiating the contract seems clear since it is the period of preparation for the contract; the better the negotiations are, the better the contract will be without any deficiencies or ambiguities or arising future disputes
In order not to be a source of arbitrariness, this phase is governed by another principle: the principle of good faith, which is a mutual obligation of the parties to the negotiation and which arises once the parties enter into negotiations
In reference to the provisions of the Palestinian Civil Code Draft, we find that it is devoid of any provisions governing the contractual negotiation phase or any provision imposing the obligation of behaving in good faith at this phase, where the Palestinian legislature made the first paragraph of article 148 of the PDCC clearly limited to obligating the contracting parties to implement the contract in good faith.[35]
Summary
The importance of negotiating the contract seems clear since it is the period of preparation for the contract; the better the negotiations are, the better the contract will be without any deficiencies or ambiguities or arising future disputes. Each negotiating party wants to be in a position to resolve the obligations imposed by the legal principles that govern the phase of the negotiations. It wants to divest the agreements that permeate the negotiations phase from any legal value and, that, but more importantly, to abandon and terminate the negotiations at a time when it wants to realize the principle of contractual freedom. In order not to be a source of arbitrariness, this phase is governed by another principle: the principle of good faith, which is a mutual obligation of the parties to the negotiation and which arises once the parties enter into negotiations. In order to maintain the contractual economic balance between the parties to the negotiations, we are required us to study the concept of good faith and its function in maintaining the contractual balance between contractual parties and their legal nature
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