On Legal Effect Of The Precontract

The precontract is a kind of contract to agree to work out a certain contract in the future. It is in the process of the contract and puts unremitting efforts for the establishment of the contract. The precontract exists extensively in the practice, but it is absent in the theory, which resulted great disputes. It is essential to discuss theoretically the nature of the precontract, the liability when it is breached. The author would like to make a brief analysis on the precontract's nature, legal efficacy and liability.The article can be divided into four parts as followings:The first part is the research on the basic theory of the precontract. The author begins her discussion with the definition of the precontract. She defines the precontract as the type of contract to agree to enter into the certain contract in the future between certain parties, it is specific in the content and effective in the law. Secondly, the author analyzes the legal characteristics of the precontract. The author thinks it is a consensual contract with a subject to negotiate in the principle of faithfulness for concluding the contract and specific content, namely indicating definitely the intent of making the contract latterly as well as expressing the the subject of the precontract, but not the main clauses of the contract. Finally, the author differentiates the precontract with the contract, letter of intent, memorandum, the contract with condition, real contract, formal contract and framework contract.The second part is to analyze the legal effect of the precontract. Firstly, the author considers that the principles of freedom of contract, faithfulness and reliance as theoretical bases for effecting of the precontract. Secondly, the author summarizes the prevailing opinions on this issue, analyzes them and puts forward her own points: the precontract's effect is to constraint the parties to negotiate faithfully for making the contract in the future, but not including the concluding and performing of the contract. At last, the author points out that obligations of the precontract are not to refuse and interrupt the negotiation, not to impose any unfair conditions, to disclose related information in time and the duty of confidentiality and so on,The third part is the discussion of the civil liability when breaching the precontract. At first, the author thinks that the fault liability principle should be abided by in the general con tract as well as in the precontract. Secondly, the author talks about the liability in the precontract, mainly distinguishes the liability of breaching the precontract from liability of fault in making a contract, meanwhile, she points out that the actual fulfillment can not be applied in the precontract, the damage compensation can only include the reliable benefits but not the expected interests, and the compensation range should cover the expenses and lose of opportunities interests. The author also thinks deposit and penalty can be pre-settled in the precontract, termination of a precontract is available when the contractual purpose is beyond the reach.The fourth part is the conclusion of this paper, including the major points of view of the author.