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University of Michigan Law School

Michigan Law Review

2009

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Full-Text Articles in Law

An Information Theory Of Willful Breach, Oren Bar-Gill, Omri Ben-Shahar Jun 2009

An Information Theory Of Willful Breach, Oren Bar-Gill, Omri Ben-Shahar

Michigan Law Review

Should willful breach be sanctioned more severely than inadvertent breach? Strikingly, there is sharp disagreement on this matter within American legal doctrine, in legal theory, and in comparative law. Within law-and-economics, the standard answer is "no "-breach should be subject to strict liability. Fault should not raise the magnitude of liability in the same way that no fault does not immune the breaching party from liability. In this paper, we develop an alternative law-and-economics account, which justifies supercompensatory damages for willful breach. Willful breach, we argue, reveals information about the "true nature" of the breaching party-that he is more likely …


Willfulness Versus Expectation: A Promisor-Based Defense Of Willful Breach Doctrine, Steve Thel, Peter Siegelman Jun 2009

Willfulness Versus Expectation: A Promisor-Based Defense Of Willful Breach Doctrine, Steve Thel, Peter Siegelman

Michigan Law Review

Willful breach doctrine should be a major embarrassment to contract law. If the default remedy for breach is expectation damages designed to put the injured promisee in the position she would have been in if the contract had been performed, then the promisor's behavior-the reason for the breach-looks to be irrelevant in assessing damages. And yet the cases are full of references to "willful" breaches, which seem often to be treated more harshly than ordinary ones based on the promisor's bad/willful conduct. Our explanation is that willful breaches are best understood as those that should be prevented or deterred because …