: 
Global Law Working Papers
2006 Series
GLWP 12/06
Author
Ben McFarlane
Global NYU-Oxford Research Fellow (2006-2007)
Title
"The Problem of Pre-Contractual Reliance: Three Ways to a Third Way"
Abstract
This paper draws on English, United States and Australian law, as well as doctrinal and economic analyses, to consider a problem faced by all legal systems. If A and B enter into negotiations as to a potential bargain, B may incur costs in reliance on the possibility of a contract's being concluded. The traditional approach is that, if B acts in the absence of a binding contract, he does so at his own risk. This paper supports a new proposal: where B reasonably relies to his detriment on a belief, for which A is responsible, that a contract will be concluded, A will be under a duty to protect B's reliance.
Contact the Author
ben.mcfarlane@law.ox.ac.uk
