Contract negotiations and the UNIDROIT Principles

The UNIDROIT Principles of International Commercial Contracts (PICC) have had a significant effect on the legal impact of contract negotiations. Many recent court and arbitral decisions have relied on the PICC when ruling on issues relating to contract negotiations. In this context, this article analyzes the duties of the negotiator, and outlines the liability and remedies available in the case of a breach of the duty to negotiate in good faith. It then considers the relevance of contract negotiations, in light of the PICC, for the later interpretation of contracts by courts and arbitral tribunals. The article concludes with the recommendation that principles in the PICC be considered model clauses that can be incorporated into contracts.