Parties negotiated a lease agreement but the lease was not signed as the lessor decided to sell the property and withdrew from the negotiation and later withdrew from that intent but the parties did note reach an agreement as to the terms of the lease.
The Court held that non-disclosure of facts when circumstances dictate that a person who is part of the negotiation will reveal them to the other party, may be considered breach of duty to act in good faith in negotiations. The lessees did not know of the desire to sell the apartment, relied on the intent to lease the apartment and enlisted their children to a kindergarten nearby. However, the Court rejected the claim because the lessor's reliance was premature and the real reason for non-executing the lease was not the intent to sell but the non-reaching of agreements as to the terms of the lease.