Culpa in contrahendo

Culpa in contrahendo is a Latin expression meaning "fault in conclusion of a contract". It is an important concept in contract law for many civil law countries, which recognise a clear duty to negotiate with care, and not to lead a negotiating partner to act to his detriment before a firm contract is concluded. In German contract law, §311 BGB lists a number of steps by which an obligation to pay damages may be created.

By contrast, in English contract law, and many other common law jurisdictions, there has been stulted judicial acceptance of this concept. The doctrine of estoppel has been mooted by academics as a good model, but judges have refused to let it be a sidestep of the doctrine of consideration, saying estoppel must be a shield not a sword, and calling instead for Parliamentary intervention. On the other hand in the case of land, proprietary estoppel effectively created obligations regardless of any pre-existing contract. In the United States, however, courts have allowed promissory estoppel to function as a substitute for the consideration doctrine. This movement was stimulated by the acceptance of the concept in section 90 of the first Restatement of Contracts.

Culpa in Contrahendo in German Law Rudolf von Jhering is credited with the discovery of the culpa in contrahendo doctrine. Originally, according to the prevailing interpretation of the Bürgerliches Gesetzbuch or German Civil Code, there was no equivalent legal doctrine. The courts saw a gap in the legal system of the Civil Code, and filled it with the development of culpa in contrahendo.

Since the modernisation of the Law of Obligations in 2001, the legal doctrine is provided for by statute. (§311(2) in connection with §§280(1) and 241(2) of the Civil Code)

See also

• Walton Stores Ltd v Maher
• Friedrich Kessler and Edith Fine, Culpa in Contrahendo, Bargaining in Good Faith, and Freedom of Contract: A Comparative Study, 77 Harv. L. Rev. 401 (1964).

References

• Ihering, Culpa in contrahendo oder Schadenersatz bei nichtigen oder nicht zur Perfection gelangtei Vertragen (1860) in Ihering, Gesammelte Aufsätze (1881). Ihering argued that the "reliance measure" ought to be the proper one in "not quite" contracts, e.g. where there is a misunderstanding as to the terms of the contract.