Law Commons^™

Precontractual Liability And Preliminary Agreements, Alan Schwartz, Robert E. Scott

Faculty Scholarship

For decades, there has been substantial uncertainty regarding when the law will impose precontractual liability. The confusion is partly due to scholars' failure to recover the law in action governing precontractual liability issues. In this Article, Professors Schwartz and Scott show first that no liability attaches for representations made during preliminary negotiations. Courts have divided, however, over the question of liability when parties make reliance investments following a "preliminary agreement." A number of modern courts impose a duty to bargain in good faith on the party wishing to exit such an agreement. Substantial uncertainty remains, however, regarding when this duty …