In Danish contract law there is an established principle that there is freedom to contract between two parties as long as the contract does not breach with any mandatory legislation. The problem may in some cases be that one of the contracting parties can have a legitimate expectation so that the other party will be liable for the parts reliance if it has resulted in a loss. A party can be liable even though it was not the intention to induce the expectation and therefore the reliance of the other party. This is similar to “promissory estoppel” in American law. The legitimate expectation does not have to arise from a direct promise, but can be caused by the other party’s actions or statements. The concept is neither addressed in any legal papers nor in the legislation in Denmark. However, in case law legitimate expectations have existed in many years. Therefore, the aim of this paper is threefold: The first aim is to explain the legal content of legitimate expectations from a juridical viewpoint. Second, the concept will be explained from an economic point of view, to see if the Courts regulation is efficient. Finally, the thesis will discuss possibilities, problems and terms in relation to legislate within this matter. The thesis uses Danish case law to clarify the legal content of a legitimate expectation. In the legal chapter the analysis will be concerning sales law. The thesis argues that there have to be four objective cumulative conditions before damages can be awarded as a remedy for a given legitimate expectations. In the economic analysis it is concluded that the Courts decision appears to be efficient. The purpose with the analysis is to determine economic efficiency considerations of a legitimate expectation in a contractual and in a pre-contractual situation. It is concluded that the Courts make a sharp distinction between legitimate expectations in the two situations. It is argued in the thesis that this is efficient. Because of the more expansive use of legitimate expectations in the last couple of years it seems efficient to regulate the term in the legislation. This appears to be efficient because the legitimate expectation in lots of cases is rejected because it does not meet the four conditions presented in the legal analysis in this thesis and thus the lacking legislation seems to be unnecessary costly.
|Educations||MSc in Commercial Law, (Graduate Programme) Final Thesis|
|Number of pages||84|