Legal Issues in Pre-contractual Liability

Abstract

This article examines the principle of pre-contractual liability, which serves as an important legal mechanism for protecting parties acting in good faith during the pre-contractual negotiation process. The significance of this principle has increased substantially in the context of modern commercial transactions, where negotiations are often complex, lengthy, and involve significant investments of time and resources. The objectives of this study are to explain the concept and fundamental principles of pre-contractual liability, to analyze and compare the relevant legal framework under the Draft Common Frame of Reference (DCFR) with the current legal position in Thailand, and to identify the existing limitations and legal gaps in Thai law.

This study employs a qualitative research methodology based on documentary research and comparative legal analysis. It examines the provisions governing pre-contractual liability under the Draft Common Frame of Reference (DCFR) and compares them with the relevant provisions of the Thai Civil and Commercial Code. The findings reveal that the DCFR elevates the principles of good faith and fair dealing in contractual negotiations into explicit legal obligations by systematically prescribing pre-contractual duties, defining the scope of liability, and establishing appropriate remedies for damages resulting from breaches of such duties. In contrast, Thai law does not expressly recognize the doctrine of pre-contractual liability. Instead, legal protection must be derived through judicial interpretation of the general principles of good faith and tort liability under the Civil and Commercial Code. This reliance on general provisions creates legal uncertainty in both the enforcement of obligations and the protection of parties acting in good faith during contractual negotiations.

The article therefore proposes that Thailand should undertake concrete legal reform by expressly incorporating the principle of pre-contractual liability into the Thai Civil and Commercial Code. Such reform should clearly define legally enforceable pre-contractual duties and provide that parties who breach these duties shall be held liable for the resulting damages. Drawing upon the conceptual framework established by the DCFR, the proposed reform would promote a balanced relationship between the principle of freedom of contract and the protection of legitimate reliance, thereby enhancing legal certainty, strengthening confidence in commercial transactions, and improving the effectiveness of contractual negotiations.