What liability should a party bear if it violates the principle of good faith and causes losses to the other party?

According to the principle of voluntariness, the parties can freely decide whether to enter into a contract, with whom to enter into a contract, and what kind of contract to enter into. If you negotiate with others to conclude a contract and the negotiation fails, you will generally not be held liable. However, the parties shall abide by the principle of good faith when negotiating contracts. If one party violates the principles of good faith and fair dealing, engages in malicious negotiations, and causes losses to the other party, it shall bear liability for contracting negligence. Liability for negligence in contracting refers to the liability borne by a party who conducts negotiations in bad faith without intending to enter into a contract with the other party, resulting in the failure of the contract to be established or effective.

The so-called bad faith negotiation generally refers to one party starting or continuing negotiations without intending to reach an agreement with the other party. If one party negotiates in bad faith or terminates negotiations in bad faith, that party shall bear contracting negligence liability for the losses caused to the other party. The main cases of contracting negligence include:

1. Negotiations are conducted in bad faith under the pretense of entering into a contract. The so-called "pretend" means that there is no purpose of entering into a contract with the other party at all, and the negotiation with the other party is just an excuse. The purpose is to harm the interests of the other party or a third party, and the contract negotiation is conducted maliciously with the other party. For example: A knows that B intends to transfer the restaurant, but A does not want to buy the restaurant, but in order to prevent B from selling the restaurant to competitor C, he pretends to have a long negotiation with B. When C bought another restaurant, A broke off the negotiations. Later, B transferred the restaurant at a lower price than C's bid. B's loss is the difference between the two prices.

2. Concealing important facts or providing false information when entering into a contract. In the process of concluding a contract, one party has learned important information related to the contract and knows that the contract cannot be established, but does not tell the other party and continues to negotiate with the other party without intending to reach an agreement with the other party, causing consequences to the other party. The losses must be compensated. An example can illustrate this problem: A is negotiating with B in order to promote special equipment produced by B. A understands that B will not be able to obtain the necessary export license from the competent government agency, which is a prerequisite for A to pay B. However, A did not inform B of this fact and finally signed a contract. The contract could not take effect because it did not obtain a license. A must bear all expenses incurred by B after learning about the situation.

3. Other behaviors that violate the principle of good faith. The parties negotiate in accordance with the principle of good faith. It is not surprising that some negotiations are successful and some are not. It is also normal to stop the negotiation midway. However, if a party violates the principle of good faith and terminates negotiations, it is abnormal. If it harms the other partyThe interests of the party will bear the responsibility for the contracting fault and compensate for the losses. For example, A promises B that if B works hard to gain experience and is prepared to invest US$150,000, he will grant B an exclusive license. In the following two years, B has done a lot of work to conclude the contract and has been convinced that he will obtain A's exclusive license. When all preparations for entering into the agreement are in place, A notifies B that a larger amount must be invested. B has the right to reject this request and also has the right to require A to compensate him for the expenses incurred in preparing to conclude the contract.

The party responsible for contracting negligence shall compensate the injured party. Compensation shall be limited to the losses of the injured party. This loss includes the reduction of direct benefits, such as costs incurred in negotiations, and should also include the loss of the opportunity for the injured party to conclude a contract with a third party. In the case of a restaurant, the price difference must be compensated.