Towards a contractual relation: legal aspects of negotiations

Towards an Agreement: Any offer (oral or written) followed by an acceptance constitues an agreement Oral agreement and written agreement: matter of proof By-partial or multi-partial agreements The will of the respective parties

Three phases in contractual process Precontractual phase Contractual phase (performance) Postcontractual phase “Good faith” essential in every phase

Precontractual phase Meetings, discussions: negotiations Time to sign a non-disclosure agreement / confidentiality agreement

Precontractual phase (continued) 100 % confidentiallity, even with penalties, does not exist: remain reluctant in disclosing information

Battle of forms Collision between general terms and conditions of either party Priority to own terms and conditions Which conditions apply?

Terminology MOU, LOI Binding to what extent? Ensure: sufficient escape clause Termination of LOI etc. without liability?

Termination rights and responsibility during negotiations Beginning: free to disrupt Advanced stage: disrupting allowed but costs have to be compensated Final stage: disrupting is a violation of good faith: full compensation of damages and costs

Performance of contracts Also here the rules of good faith are to be obeyed Shortcommings make a party liable and damages should be compensated (culpable shortcommings) Reasonable term to perform obligations

Non-Disclosure Agreement Recitals Awareness of confidentiallity Undertaking to keep secret Compliance by third persons

Non-Disclosure Agreement Penalties upon violation Term of agreement No license or any grant of rights