To what extent is contractual fairness vis-ȃ-vis pre-contractual liability guaranteed under Maltese civil law?

Abstract

The primary focus behind this research paper is that of determining the extent by which the Maltese law of obligations is subject to contractual fairness practices within the precontractual stages of conducting business. The Maltese civil code is largely based on the Napoleonic code, traditionally rooted in the teoria della volonta. This doctrine ensured the parties liberty to withdraw and revoke their offers during the course of negotiations, without facing liabilities. In pursuit of greater contractual fairness, many civil legal systems have gradually parted from the strict application of this doctrine, and subsequently transitioned towards the application of principles of affidamento. This doctrine poses several restriction to the will theory, allowing for damages to arise beyond the perimeters of a contract, in an attempt to rectify losses faced by one party for the failure to negotiate in good faith by the other. The first chapter of this research paper provides for the historical development of the will theory and the doctrine of good faith. Chapter 2 subsequently provides for a comparative analysis of various civil law jurisdictions, with the aim of illustrating the distinct approaches adopted by each country. This comparative exercise will prove beneficial in Chapter 4, wherein such information is evaluated in an attempt to identify the most effective way forward for Maltese civil law. The Maltese civil code does not admit to pre-contractual liability perse, giving rise to several contradicting judgements. This shall be discussed further in chapter 3. It is imperative for the law not to be burdensome such as to discourage the initiation of negotiations. The research paper thus enters into the merits of the interesse negativo in an attempt to restrict pre-contractual damages to the actual expenses incurred in good faith, in anticipation of a contract. The study's findings show that, while the Maltese Civil Law provides some guarantees and safeguards of contractual fairness vis-à-vis pre-contractual liability, the legal framework still has significant gaps and limitations. It is argued that an amendment to the civil code is merited to account for such limitations and to provide further judicial certainty. The dissertation concludes with legal reform recommendations, encouraging further research in this area.