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Full-Text Articles in Law
The Myth Of Optimal Expectation Damages, Theresa Arnold, Amanda Dixon, Madison Sherrill, Mitu Gulati
The Myth Of Optimal Expectation Damages, Theresa Arnold, Amanda Dixon, Madison Sherrill, Mitu Gulati
Faculty Scholarship
A much-debated question in contract law scholarship is what the optimal measure of damages for breach should be. The casebook answer-drawing from the theory of efficient breach-is expectation damages. This standard answer, which was a major contribution of the law and economics field, has come under attack by theoreticians within that field itself. To shed an empirical perspective on the question, we look at data on the types of damages provisions parties contract/or themselves in international debt contracts. Specifically, we examine issuer call provisions, which are economically equivalent to damages for prepayment, yet not viewed as legally problematic in the …
Some Issues On The Law Of Direct Damages (Us And Uk), Victor P. Goldberg
Some Issues On The Law Of Direct Damages (Us And Uk), Victor P. Goldberg
Faculty Scholarship
When a contract is breached, both U.S. and U.K. law provide that the non-breaching party should be made whole. The Uniform Commercial Code (“UCC”) provides that “[t]he remedies provided by this Act shall be liberally administered to the end that the aggrieved party may be put in as good a position as if the other party had fully performed.” The English version, going back to Robinson v. Harman, is “that where a party sustains a loss by reason of breach of contract, he is, so far as money can do it, to be placed in the same situation, with …
Cleaning Up Lake River, Victor P. Goldberg
Cleaning Up Lake River, Victor P. Goldberg
Faculty Scholarship
A casebook favorite for exploring the liquid dated damage/penalty clause distinction is Lake River Corp. v. Carborundum Co. in which Judge Posner found a minimum quantity clause to be an unenforceable penalty clause. In this paper I argue that the case was framed improperly. Had the litigators recognized that the contract afforded one party an option, the result should have been different. The contract was for the provision of a service – setting aside capacity – which was valuable to the buyer and costly for the seller to provide. The primary purpose of the minimum quantity clause was the pricing …
Comment: On Contractual Defaults And Experimental Law And Economics, Avishalom Tor
Comment: On Contractual Defaults And Experimental Law And Economics, Avishalom Tor
Journal Articles
It is possible that contract default rules, whose relevance is contingent upon parties' agreement to contract, differ from other default states. Parties therefore might not perceive contingent contractual defaults as relevant reference points. Ironically, however, Sloof, Oosterbeek and Sonnemans' (SOS) "default contract" applied inevitably whenever proposed and whenever Respondents rejected a non-default proposal, bearing greater resemblance to a legal right than to a contractual default. Thus, the contingency of typical contractual defaults cannot account for the No Bias Finding. Other aspects of the SOS experimental design, on the other hand, may explain the No Bias Finding.
The Law And Economics Of Contracts, Benjamin E. Hermalin, Avery W. Katz, Richard Craswell
The Law And Economics Of Contracts, Benjamin E. Hermalin, Avery W. Katz, Richard Craswell
Faculty Scholarship
This paper, which will appear as a chapter in the forthcoming Handbook of Law and Economics (A.M. Polinsky & S. Shavell, eds.), surveys major issues arising in the economic analysis of contract law. It begins with an introductory discussion of scope and methodology, and then addresses four topic areas that correspond to the major doctrinal divisions of the law of contracts. These areas include freedom of contract (i.e., the scope of private power to create binding obligations), formation of contracts (both the procedural mechanics of exchange, and rules that govern pre-contractual behavior), contract interpretation (what consequences follow when agreements are …
Bloomer Girl Revisited Or How To Frame An Unmade Picture, Victor P. Goldberg
Bloomer Girl Revisited Or How To Frame An Unmade Picture, Victor P. Goldberg
Faculty Scholarship
Nearly all contracts casebooks feature the saga of Shirley MacLaine's suit against Twentieth Century Fox arising from the cancellation of the proposed film Bloomer Girl. None really get the story right. To be fair, none try. The case is a vehicle for exploring the obligation of the victim of the breach of an employment contract to take alternative employment. If MacLaine refused an offer of alternative employment that was not "different and inferior," her failure to mitigate would mean that the earnings she would have received would be offset against the damages; so, asked the court, was the alternative …
Recovery For Pure Economic Loss In Tort: Another Look At Robins Dry Dock V. Flint, Victor P. Goldberg
Recovery For Pure Economic Loss In Tort: Another Look At Robins Dry Dock V. Flint, Victor P. Goldberg
Faculty Scholarship
In Robins Dry Dock and Repair Co. v. Flint, the Supreme Court laid down the general proposition that claims for pure economic loss are not recoverable in tort. Although courts have sometimes ignored or distinguished Robins, its holding is still a central feature of tort law. In a recent en bane decision regarding claims by those injured by a chemical spill in the Mississippi River, the Fifth Circuit engaged in an extensive debate over the continued vitality of Robins and concluded (despite five dissenters) that it remained good law.
The Robins rule is overbroad, lumping together a number of …
Co-Operative Marketing--Statutes Providing Penalty Against Third Persons Who Induce Breach Of Marketing Contracts, Thomas F. Broden
Co-Operative Marketing--Statutes Providing Penalty Against Third Persons Who Induce Breach Of Marketing Contracts, Thomas F. Broden
Journal Articles
Capitalism is most prudent in accepting into its legal system measures of governmental regulation which apply to economic relations generally and contract relations particularly. Efforts of the executive, legislative or judicial branches of either British or American governments to directly control phases of contractual relationships have generally met staunch and rigid opposition. The spirit of the sacredness and inviolability of the contract relation was a logical outgrowth of the capitalistic system in its inception. At that time freedom was a passion, self-sufficiency a goal. From an era thus shrouded and bedecked with individualism, it is little wonder that measures affecting, …