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Course Introduction to International Business Law
Lecture 2

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Topics
•Revision lecture 1
–Questions
•Subjects of today:
–At what moment have you reached an agreement?
–Stages of preliminary negotiations.
–Breaking of negotiations (breach of contract and tort).
–Homework

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Reaching an agreement
•An agreement is concluded when one party accepts (offeree) the offer of another party (offerer)
•Legal offer:
–an offer is described
–a price is determined
–the number of objects is given
•Invitation to enter into negotiations
–

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Reaching an agreement 2
•Reception theory: the offer is valid when it reaches the other party
•Withdrawing an offer -> prevents that the offer becomes a valid offer
•Revoking an offer -> valid offer but offerer changes his mind and cancels
–
•

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Reaching an agreement 3
•No revocation
–The offer has already been accepted by the offeree
–The offer is irrevocable
•

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Stages of preliminary negotiations
•Rules of good faith
•According to EU jurisprudence two stages in the negotiation phase:
–Stage 1: parties start negotiating/exploring possibilities
–Stage 2: an agreement is within reach

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Breaking of negotiations
•Possibility to claim damages?
–Using breach of contract?
–Using tort?
–

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Claim damages?
•Stage 1: Parties are free to break off negotiations, no claims •Stage 2: with the agreement within
reach no liberty to break off the negotiations unless the breaking off party pays for the costs (&
loss of profit)

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Using breach of contract?
•Parties have already concluded a contract when they agree on two essential elements ->
–Price
–Object
•The party that breaks off is liable for damages of the other party

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Using Tort?
•In case parties didn’t agree on price and/or object -> no agreement reached.
•Claim damages based on tort
•Relevance of “good faith’ and in what way the interest of the other party was taken into
consideration

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Homework
•Exercises 1 and 2 Chapter 2