Damages for Breach of Contract
TLDR
The traditional model of business conduct in perfectly competitive markets is described in this article. But the model does not consider the effect of economic factors on business conduct and is not suitable for the modern market.Abstract:
I. THE MEANING OF INJURY AND COMPENSATION ........... 1435 II. BASIC DAMAGE FORMULAS ............................... 1438 A. Substitute-Price ....................................... 1439 B. Lost-Surplus .......................................... 1439 C. Opportunity-Cost ...................................... 1440 D. Out-of-Pocket-Cost .................................... 1442 E. Diminished-Value ..................................... 1442 F Add-Ons and Offsets .................................. 1442 III. COMPENSATORY DAMAGES AND MARKET STRUCTURE .... 1444 A. Perfectly Competitive Markets ......................... 1445 L The Traditional Model of Business Conduct in Perfectly Competitive Markets ..................... 1445 2. The Statistical-Planning Model of Business Conduct in Perfectly Competitive Markets ................... 1449 B. Imperfectly Competitive Markets ....................... 1451 1. The Traditional Model of Business Conduct in Imperfectly Competitive Markets ................... 1451 2. The Fishing Model of Business Conduct in Imperfectly Competitive Markets ................... 1455 IV. WHAT MEASURE OF DAMAGES SHOULD THE LAW PREFER? ..... .................................... .. 1459 A. The General Case ..................................... 1459 1. Performance ...................................... 1462 2. Precaution ........................................ 1464 3. Reliance .......................................... 1465read more
Citations
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Journal ArticleDOI
On the Efficiency of Privately Stipulated Damages for Breach of Contract: Entry Barriers, Reliance, and Renegotiation
TL;DR: In this article, the authors argue that if an entrant has market power and the seller's cost of production is observable but not verifiable, then privately stipulated damages are set at a socially excessive level to facilitate the extraction of the entrant's surplus.
Book
Contract Law: Rules, Theory, and Context
TL;DR: In this paper, the authors present an accessible introduction to all aspects of American contract law, useful to both first-year law students and advanced contract scholars, taking the reader from contract formation through interpretation and remedies, considering both practical and theoretical aspects throughout.
Posted Content
Contract Remedies: General
TL;DR: In this paper, the authors present an up-to-date, clear and comprehensive review of the economic literature on contract law, focusing on the following areas of interest: contract law.
ReportDOI
Cadillac Contracts and Up-front Payments: Efficient Investment under Expectation Damages
TL;DR: This paper showed that up-front payments can eliminate the overinvestment effect identified by Shavell (1980), by controlling which party breaches a contract, and that "Cadillac" contracts (contracts for a very high quality or quantity) can protect against underinvestment due to Williamsonian holdups.
Journal ArticleDOI
Contract Remedies and Inalienable Rights
TL;DR: In this paper, the authors use a "consent theory of contract" to assess the choice between money damages and specific performance, and they conclude that the normal rule favoring money damages should be replaced with one that presumptively favors specific performance unless the parties have consented to money damages instead.