n South African Law Journal - Liability for breaking off contractual negotiations?

Volume 129, Issue 1
  • ISSN : 0258-2503
  • E-ISSN: 1996-2177



In the negotiation phase of a contract opposing parties make representations to each other in the process of attempting to reach agreement. Assuming there has been wasted expenditure on one side in anticipation of the contract, can a party recover its losses should negotiations fail? There is a dearth of South African case law in this area, but foreign jurisprudence demonstrates the prevalence of this problem. Can benefits conferred on the other party during negotiations be recouped? Alternatively, does an action lie for reliance losses? What would be the basis of such claims? And what measure of compensation would a court award? This article will interrogate issues surrounding the recoverability of potential enrichment and the possibility of a delictual action for breaking off negotiations if sufficient progress has been made in those negotiations and there has been reasonable reliance on a representation by the recalcitrant party.

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