Law Commons^™

Boundaries Of Extracompensatory Relief For Abusive Breach Of Contract, The , Nicholas J. Johnson

Faculty Scholarship

The idea of extracompensatory damages for abusive breach of contract presents a fundamental conflict. Contract doctrine aims to facilitate exchanges. Extracompensatory damages are disincentives. These aims are essentially irreconcilable. And traditionally the goal of facilitating exchanges has trumped any interest in punishing bad conduct. But there is a lingering sense that sometimes a proportionate response to bad conduct surrounding breach requires more than the traditional measure of damages. At the edges of contract doctrine, two notable experiments manifest the sense that some breaches demand more than compensatory damages. One, the failed California experiment with bad faith breach, permitted the plaintiff …