The liability for damages caused by the termination of contractual negotiations without a just cause shall be rather an exception than a rule

(Judgement of the Supreme Court of the CR, No. 25 Cdo 856/2018, from 30 October 2018)

The plaintiff claimed damages of CZK 55 600 caused by termination of contractual negotiations for the lease agreement without a just cause. These damages correspond with the two months’ lost rent. The defendant claimed that she had the just cause for the termination of negotiations (she had decided to buy the flat instead of rent it).

The Court of First Instance dismissed the action and held that the defendant had the just cause for the termination, and her conduct was not unfair. The Court of Appeal upheld its decision and emphasized that the parties had not concluded the booking agreement, which should affirm their serious intention. Moreover, the offered flat had not been withdrawn from the real estate agency advertisement. The plaintiff filed an extraordinary appeal to the Supreme Court.

The Supreme Court dismissed this extraordinary appeal.

The Supreme Court stressed that the assessment of a just cause and of fairness or unfairness of the conduct, shall not be too strict. A just cause represents any rational consideration of the conducting party involving the objective facts as well as the tenable subjective belief depending on the individual circumstances of the case. And at the same time, if the party does not explain its considerations to the other party, this cannot be interpreted as an unfair conduct. 

This decision of the Supreme Court has been a first case-law piece regarding the assessment of the pre-contractual liability under the new Civil Code. Nevertheless, the Supreme Court has followed its precedent decision-making practice in this decision.