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To Perform Or Pay Damages, Gregory Klass

Georgetown Law Faculty Publications and Other Works

In The Myth of Efficient Breach: New Defenses of the Expectation Interest, Daniel Markovits and Alan Schwartz argue that contractual promises between sophisticated parties are best interpreted as disjunctive promises to perform or pay damages. They further argue that this dual performance hypothesis answers moral critics of the expectation remedy. This comment makes three claims about Markovits and Schwartz's argument. First, although the dual performance hypothesis is supported by Markovits and Schwartz's instrumentalist model, they do not have a good argument that it is empirically correct -- that it is the best interpretation of what sophisticated parties actually intend. …