Negotiation and contractual responsibility

Extract

[...] - The party enters into negotiations with the intention to conclude a contract but changes his mind and then withdraws from the negotiations. - Negotiations worked, a contract is completed, and then discovers that the contract is invalid. - The contract is valid, but it turns out that one of the parties was behaving in a bad way during negotiations to obtain advantages. (This option wasn't available in the past because the jurisprudence didn't accept the claim for remedies in case of a completed contract). [...]

[...] Negotiation and contractual responsibility I. Negotiation before, during and after contractual relationship A. Pre-contractual liability: During the negotiations there are two provisions in Italy, "parties must behave in good faith during negotiation and before completion of contract"; " the party knowing or having to know a reason of invalidity for the present case, and fail to disclose the information, will be liable for damages to be paid to the other party". B. During the life of the contract Invalidity means the contract is subject to avoidance. [...]

[...] In this case the contract is valid, but the fraudulent party is liable for damages. - Decisive: the contract is invalid. Fraudulent behavior could be passive (don't disclose information, or active (hiding something to the counter party). In the case of a mandate = proxy or procuration, you should disclose to the third party a document assessing your power to act on behalf of the represented party. Otherwise, it's an abuse of power and we should know about the goodwill of the third party. [...]

[...] Thus, if the three criteria or if the provisions of the law aren't respected, the contract is subject to the remedy of voidity. Difference between voidity and avoidance: - Avoidance is a remedy applicable when we talk about the interest of the parties, these are disposable (not of public interest), when a person is legally incapable of acting, vices of consent (error, violence and fraud). In case of avoidance, you have 5 years since you discovered the vice of the case, in case of representation with an agent going beyond his prerogatives but the other party should have known that there is misrepresentation. [...]