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Articles 1 - 30 of 148
Full-Text Articles in Contracts
In (Partial) Defense Of Strict Liability In Contract, Robert E. Scott
In (Partial) Defense Of Strict Liability In Contract, Robert E. Scott
Michigan Law Review
Many scholars believe that notions of fault should and do pervade contract doctrine. Notwithstanding the normative and positive arguments in favor of a fault-based analysis of particular contract doctrines, I argue that contract liability is strict liability at its core. This core regime is based on two key prongs: (1) the promisor is liable to the promisee for breach, and that liability is unaffected by the promisor's exercise of due care or failure to take efficient precautions; and (2) the promisor's liability is unaffected by the fact that the promisee, prior to the breach, has failed to take cost-effective precautions …
Could Breach Of Contract Be Immoral?, Seana Shiffrin
Could Breach Of Contract Be Immoral?, Seana Shiffrin
Michigan Law Review
Some scholars defend the contract law's ban on punitive damage awards on the grounds that breach of contract, in itself, is not morally wrong. In this Article, I offer two responses. First, I refute one prevalent argument of Steven Shavell's in support of this view. Shavell argues that contractual breach is not immoral in those cases in which the legal regime would offer expectation damages because the contracting parties would not have agreed to require performance had they explicitly deliberated about the circumstances occasioning the breach. I criticize his argument for failing to justify this hypothetical-contract approach and, in any …
Let Us Never Blame A Contract Breaker, Richard A. Posner
Let Us Never Blame A Contract Breaker, Richard A. Posner
Michigan Law Review
Holmes famously proposed a "no fault" theory of contract law: a contract is an option to perform or pay, and a "breach" is therefore not a wrongful act, but merely triggers the duty to pay liquidated or other damages. I elaborate the Holmesian theory, arguing that fault terminology in contract law, such as "good faith," should be given pragmatic economic interpretations, rather than be conceived of in moral terms. I further argue that contract doctrines should normally be alterable only on the basis of empirical investigations.
The Fault That Lies Within Our Contract Law, George M. Cohen
The Fault That Lies Within Our Contract Law, George M. Cohen
Michigan Law Review
Scholars and courts typically describe and defend American contract law as a system of strict liability, or liability without fault. Strict liability generally means that the reason for nonperformance does not matter in determining whether a contracting party breached. Strict liability also permeates the doctrines of contract damages, under which the reason for the breach does not matter in determining the measure of damages, and the doctrines of contract formation, under which the reason for failing to contract does not matter In my Article, I take issue with the strict liability paradigm, as I have in my prior work on …
Willfulness Versus Expectation: A Promisor-Based Defense Of Willful Breach Doctrine, Steve Thel, Peter Siegelman
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 …
Foreword: Fault In American Contract Law, Omri Ben-Shahar, Ariel Porat
Foreword: Fault In American Contract Law, Omri Ben-Shahar, Ariel Porat
Michigan Law Review
The basic rule of liability in tort law is fault. The basic rule of liability in contract law is no fault. This is perhaps one of the most striking divides within private law, the most important difference between the law of voluntary and nonvoluntary obligations. It is this fault line (speaking equivocally) that the present Symposium explores. Is it a real divide-two opposite branches of liability within private law-or is it merely a rhetorical myth? How can it be justified? As law-and-economics scholars, this fault/no-fault divide between contract and tort is all the more puzzling. In law and economics, legal …
Stipulated Damages, Super-Strict Liability, And Mitigation In Contract Law, Saul Levmore
Stipulated Damages, Super-Strict Liability, And Mitigation In Contract Law, Saul Levmore
Michigan Law Review
The remedy of expectancy damages in contract law is conventionally described as strict liability for breach. Parties sometimes stipulate damages in advance, and may agree that the damages they stipulate shall be the exclusive remedy for breach. They may do so because of their conviction that they can, even in advance, assess damages with greater accuracy than courts, and they may be wary of litigation costs associated with the postbreach determination of expectancy damages. This Article advances two claims. First, that the familiar expectation remedy is correctly understood to involve elements of fault. There is litigation over the question of …
A Comparative Fault Defense In Contract Law, Ariel Porat
A Comparative Fault Defense In Contract Law, Ariel Porat
Michigan Law Review
This Article calls for the recognition of a comparative fault defense in contract law. Part I sets the framework for this defense and suggests the situations in which it should apply. These situations are sorted under two headings: cases of noncooperation and cases of overreliance. Part II unfolds the main argument for recognizing the defense and recommends applying the defense only in cases where cooperation or avoidance of overreliance is low cost.
The Role Of Fault In Contract Law: Unconscionability, Unexpected Circumstances, Interpretation, Mistake, And Nonperformance, Melvin Aron Eisenberg
The Role Of Fault In Contract Law: Unconscionability, Unexpected Circumstances, Interpretation, Mistake, And Nonperformance, Melvin Aron Eisenberg
Michigan Law Review
It is often asserted that contract law is based on strict liability, not fault. This assertion is incorrect. Fault is a basic building block of contract law, and pervades the field. Some areas of contract law, such as unconscionability, are largely fault based. Other areas, such as interpretation, include sectors that are fault based in significant part. Still other areas, such as liability for nonperformance, superficially appear to rest on strict liability, but actually rest in significant part on the fault of breaking a promise without sufficient excuse. Contract law discriminates between two types of fault: the violation of strong …
Fault In Contract Law, Eric A. Posner
Fault In Contract Law, Eric A. Posner
Michigan Law Review
A promisor is strictly liable for breaching a contract, according to the standard account. However, a negligence-based system of contract law can be given an economic interpretation, and this Article shows that such a system is in some respects more attractive than the strict-liability system. This may explain why, as a brief discussion of cases shows, negligence ideas continue to play a role in contract decisions.
An Information Theory Of Willful Breach, Oren Bar-Gill, Omri Ben-Shahar
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 …
Fault At The Contract-Tort Interface, Roy Kreitner
Fault At The Contract-Tort Interface, Roy Kreitner
Michigan Law Review
The formative period in the history of contract and tort (in the second half of the nineteenth century) may be characterized by the cleavage of contract and tort around the concept of fault: tort modernized by moving from strict liability to a regime of "no liability without fault," while contract moved toward strict liability. The opposing attitudes toward fault are puzzling at first glance. Nineteenth-century scholars of private law offered explanations for the opposition, reasoning that alternative ideas about fault account for the different character of state involvement in enforcing private law rights: tort law governs liabilities imposed by law …
Why Breach Of Contract May Not Be Immoral Given The Incompleteness Of Contracts, Steven Shavell
Why Breach Of Contract May Not Be Immoral Given The Incompleteness Of Contracts, Steven Shavell
Michigan Law Review
There is a widely held view that breach of contract is immoral. I suggest here that breach may often be seen as moral, once one appreciates that contracts are incompletely detailed agreements and that breach may be committed in problematic contingencies that were not explicitly addressed by the governing contracts. In other words, it is a mistake generally to treat a breach as a violation of a promise that was intended to cover the particular contingency that eventuated.
The Fault Principle As The Chameleon Of Contract Law: A Market Function Approach, Stefan Grundmann
The Fault Principle As The Chameleon Of Contract Law: A Market Function Approach, Stefan Grundmann
Michigan Law Review
This Article begins with a comparative law survey showing that all legal systems do not opt exclusively for fault liability or strict liability in contract law, but often adopt a more nuanced approach. This approach includes intermediate solutions such as reversing the burden of proof, using a market ("objective") standard of care, distinguishing between different types of contracts, and providing a "second chance" to breaching parties. Taking this starting point seriously and arguing that it is highly unlikely that all legal systems err, this Article argues that the core question is how and when each liability regime should prevail or …
When Is A Willful Breach "Willful"? The Link Between Definitions And Damages, Richard Craswell
When Is A Willful Breach "Willful"? The Link Between Definitions And Damages, Richard Craswell
Michigan Law Review
The existing literature on willful breach has not been able to define what should count as "willful." I argue here that any definition we adopt has implications for just how high damages should be raised in those cases where a breach qualifies as willful. As a result, both of these issues-the definition of "willful," and the measure of damages for willful breach-need to be considered simultaneously. Specifically, if a definition of "willful" excludes all breachers who behaved efficiently, then in theory we can raise the penalty on the remaining inefficient breachers to any arbitrarily high level ("throw the book at …
The Many Faces Of Fault In Contract Law: Or How To Do Economics Right, Without Really Trying, Richard A. Epstein
The Many Faces Of Fault In Contract Law: Or How To Do Economics Right, Without Really Trying, Richard A. Epstein
Michigan Law Review
Modern law often rests on the assumption that a uniform cost-benefit formula is the proper way to determine fault in ordinary contract disputes. This Article disputes that vision by defending the view that different standards of fault are appropriate in different contexts. The central distinction is one that holds parties in gratuitous transactions only to the standard of care that they bring to their own affairs, while insisting on the higher objective standard of ordinary care in commercial transactions. That bifurcation leads to efficient searches. Persons who hold themselves out in particular lines of business in effect warrant their ability …
Choice, Consent, And Cycling: The Hidden Limitations Of Consent, Leo Katz
Choice, Consent, And Cycling: The Hidden Limitations Of Consent, Leo Katz
Michigan Law Review
Most legal scholars assume that if V consents to allow D to do something to him, such consent makes D's actions legally and morally acceptable. To be sure, they are willing to make an exception when consent is given under a specified list of conditions: Force, fraud, incompetence, third-party effects, unequal bargaining power, commodification, paternalism - all of these may be grounds for rejecting the validity of V's consent. We might call scholars who take this view of consent quasi-libertarians. In this Article, I argue against the quasi-libertarian view of consent. My central claim is that the validity of consent …
Opting Out Of Liability: The Forthcoming, Near-Total Demise Of The Modern Class Action, Myriam Gilles
Opting Out Of Liability: The Forthcoming, Near-Total Demise Of The Modern Class Action, Myriam Gilles
Michigan Law Review
It is reasonable to expect that courts will demonstrate great solicitude for the recent innovation that I term "collective action waivers" - i.e., contractual provisions contained within arbitration agreements whereby consumers and others waive their rights to participate in any form of collective litigation or class arbitration. The history of mass tort class actions and the hegemonic expansion of pro-arbitration jurisprudence compel this conclusion. And, as the now-dominant economic model of contract law has moved the focus of courts from the value of consent to the value of efficiency, arbitration agreements found in all manner of shrink-wrap, scroll-text and bill-stuffer …
Why Don't Doctors & Lawyers (Strangers In The Night) Get Their Act Together?, Frances H. Miller
Why Don't Doctors & Lawyers (Strangers In The Night) Get Their Act Together?, Frances H. Miller
Michigan Law Review
Health care in America is an expensive, complicated, inefficient, tangled mess - everybody says so. Patients decry its complexity, health care executives bemoan its lack of coherence, physicians plead for universal coverage to simplify their lives so they can just get on with taking care of patients, and everyone complains about health care costs. The best health care in the world is theoretically available here, but we deliver and pay for it in some of the world's worst ways. Occam's razor ("Among competing hypotheses, favor the simplest one") is of little help here. There are no simple hypotheses - everything …
The Interlocking Death And Rebirth Of Contract And Tort, Jeffrey O'Connell
The Interlocking Death And Rebirth Of Contract And Tort, Jeffrey O'Connell
Michigan Law Review
The first portion of this article will examine the growing inclination of courts to apply tort principles to cases based on contracts; at the same time, the defects of tort will be discussed insofar as they militate against the wisdom of so extending tort principles. In the last half of the article, an alternative contractual method for allocating losses in one particular area will briefly be presented; this method does not contain the defects in loss allocation that have impelled courts to reject traditional contractual principles, but it also avoids many inefficiencies of traditional tort remedies.
The Contractual Aspect Of Consumer Protection: Recent Developments In The Law Of Sales Warranties, William C. Pelster
The Contractual Aspect Of Consumer Protection: Recent Developments In The Law Of Sales Warranties, William C. Pelster
Michigan Law Review
As might have been expected, the courts have not confined their efforts in updating the law of products liability to fostering innovations in that segment dealing with warranties. The struggle to impose strict tort liability upon a manufacturer for harm caused by his defective products has made significant advances and is continuing: However, the citadel has yet to be taken. Indeed, even the California Supreme Court, which may be considered the leading proponent of this strict tort theory, has limited its availability so that only those seeking redress for harm to person or property may invoke the doctrine; thus, a …
The Extension Of Insurance Subrogation, Spencer L. Kimball, Don A. Davis
The Extension Of Insurance Subrogation, Spencer L. Kimball, Don A. Davis
Michigan Law Review
When an insured loss occurs under circumstances that make a third person liable to reimburse the insured, there are various possible ways to adjust the loss among the three persons involved. One solution would permit the policyholder to recover both on the insurance and from the third person, i.e., would permit double recovery for the loss. A second solution would give the third person the benefit of the insurance by denying recovery from him. A third solution would subrogate the insurer to the policyholder's rights against the third person. Combinations of these three solutions are possible by applying sometimes …
Concurrent Causation In Insurance Contracts, William Conant Brewer Jr.
Concurrent Causation In Insurance Contracts, William Conant Brewer Jr.
Michigan Law Review
A great deal of work and thought has been devoted to concurrent causation problems in the field of torts. Less attention has been paid to the insurance cases, and no serious effort has been made to formulate the separate rules applicable to them. It is the thesis of this article that concurrent causation problems which arise under an insurance contract must be handled somewhat differently from those which arise in connection with tort litigation, and that the tendency to borrow rules of law from the larger tort field and apply them to the smaller volume of insurance cases can only …
Sales - Implied Warranty - Privity Of Contract As A Prerequisite To Recovery From Manufacturer, John L. Peschel S. Ed.
Sales - Implied Warranty - Privity Of Contract As A Prerequisite To Recovery From Manufacturer, John L. Peschel S. Ed.
Michigan Law Review
Plaintiff sustained injuries in the course of his employment when a defective abrasive wheel, while being used in its intended manner, exploded in his face. The abrasive wheel was purchased by plaintiff's employer directly from the manufacturer. Plaintiff sought recovery from the manufacturer on two grounds: negligence in the manufacture of the abrasive wheel and breach of implied warranty for fitness of purpose. The negligence issue was submitted to the jury, which returned a verdict adverse to the plaintiff. The manufacturer's demurrer to the cause of action based upon implied warranty was sustained by the trial court. On appeal from …
Sales - Privity - Disclaimer Of Implied Warranty, Richard W. Odgers
Sales - Privity - Disclaimer Of Implied Warranty, Richard W. Odgers
Michigan Law Review
Husband purchased a new automobile from a dealer. The contract of sale contained on its reverse side an express warranty from the manufacturer to the "original purchaser" providing for the replacement of any parts which were returned to the manufacturer and were in its judgment defective. The warranty was " ... expressly in lieu of all other warranties expressed or implied .... " The dealer warranty was substantially identical to that extended by the manufacturer; both adhered to the form prescribed by the Automobile Manufacturer's Association. Shortly after the delivery of the automobile, wife was injured in a collision caused …
Conflict Of Laws - Release In A Tort Action - Effect Of Lex Loci Delicti And Contractus, Stanley A. Williams
Conflict Of Laws - Release In A Tort Action - Effect Of Lex Loci Delicti And Contractus, Stanley A. Williams
Michigan Law Review
Plaintiff, defendant, and a third party were involved in a three-car collision in Virginia. Plaintiff settled an action against the third party's estate by executing a release, entered into in New York, in which plaintiff reserved any claims which he might have against the defendant. He then sued defendant, a resident of Pennsylvania, in a federal district court in Pennsylvania. The lower court, applying Virginia law to determine the effect of a release of one joint tortfeasor, dismissed plaintiff's action. On appeal, held, affirmed. The law of the place of the tort governs the effect of a release, not …
Insurance - Recovery - Delay Of Insurance Company In Rejecting Application For Insurance, Harry D. Krause S.Ed.
Insurance - Recovery - Delay Of Insurance Company In Rejecting Application For Insurance, Harry D. Krause S.Ed.
Michigan Law Review
Plaintiff, designated as beneficiary by deceased life insurance applicant, sued defendant life insurance company in assumpsit. Deceased, a combat pilot in the Korean War, had applied for one of defendant's policies, passed the medical examination, and made several premium payments on the policy. After the applicant was killed in combat defendant refused payment, contending that it had never accepted the risk but that it had responded to the application with a counter offer containing an aviation waiver. Because of ·the applicant's frequent change of address and his early death this proposal had never been communicated to him. On appeal from …
Contracts - Damages - Punitive Damages Awarded For Breach Accompanied By Fraudulent Act, Theodore G. Koerner
Contracts - Damages - Punitive Damages Awarded For Breach Accompanied By Fraudulent Act, Theodore G. Koerner
Michigan Law Review
Defendants contracted to purchase a crop of alfalfa from plaintiff, harvesting and processing to be done by defendants and payment to be ascertained according to the processed weight of the alfalfa. When defendants harvested the entire crop but failed to pay for the major part of it, plaintiff brought action for breach of contract. In addition to the non-payment, plaintiff alleged fraud on defendants' part in falsifying weight records and in otherwise scheming to cheat and defraud him. On defendants' appeal from a judgment including both compensatory and punitive damages, held, affirmed. Although punitive damages are not ordinarily recoverable …
Limitations Of Action - Applicable Statute - Third-Party Injury Provision Agreed To By Contractor Subject To Contract Limitation Only, Walter L. Adams
Limitations Of Action - Applicable Statute - Third-Party Injury Provision Agreed To By Contractor Subject To Contract Limitation Only, Walter L. Adams
Michigan Law Review
More than two years following an accident in which they sustained personal injuries when their car fell into defendant's excavation, plaintiffs filed a diversity action in a federal court stating inter alia a cause of action based upon a third-party beneficiary contract entered into by defendant street contractor and the City of Philadelphia for which he was working. The contract provided in essence that defendant alone would be liable for damage sustained by any third party "irrespective of whether or not such injuries ... be due to negligence or the inherent nature of the work." The district court dismissed the …
Corporations - Officers And Directors - Liability For Inducing A Corporation To Breach Its Contracts, William H. Leighner
Corporations - Officers And Directors - Liability For Inducing A Corporation To Breach Its Contracts, William H. Leighner
Michigan Law Review
Plaintiff real estate company brought suit against the directors of a corporation and other third persons for an alleged conspiracy to induce the corporation to breach its contract with plaintiff. The complaint alleged that the corporation had entered into an agreement whereby plaintiff was to procure a purchaser for certain premises owned by the corporation and that plaintiff had found a purchaser; that before a written offer could be obtained, the corporation contracted to sell to another broker who was to be used as a conduit to transfer title to the purchaser found by the plaintiff, and who was to …