Instructions to Perform in Contract Negotiations: Comparative and Interdisciplinary Approach

Contract negotiation is the phase before the conclusion of the main contract. Although contract performance consists in the fulfilment of obligation, and therefore mostly occurs after the conclusion of a contract, in practice, contract negotiators may provide instructions to perform before contract conclusion, particularly in the sectors of national defense, construction and consulting services. This paper examines the legal consequences of instructions to perform provided during negotiations and whether or not they lead to the conclusion of the main contract. According to the legal policy of protection of the weaker party that in law and economics is consistent with the cheapest cost avoider principle and the Gunderson decision in the USA, a conclusion is reached that if the stronger party imposes the instructions to perform on the weaker party, it should be accepted that the main contract is concluded, because the stronger party in these type of cases will mostly be the cheapest cost avoider and should take the risk of non-reliance or incomplete reliance.