Possible consequences of awarding non compensatory damages for breach of contract on Commercial Law

Inhaltsverzeichnis (Table of Contents)

• Introduction.
• The Law of Contract De Lege Lata - The Law of Contract as It Is
  • The Remedies for Breaches of Contract
  • Compensatory Damages as the primary remedy..
    • The Protected Interests..
    • Limitations on the Recovery of Damages..
  • Literal Enforcement as Exceptional Remedy.
    • Specific Performance.
    • Injunctions......
  • The Settled Restitutionary Remedies.
    • The law of contract as a default system
• A-G v Blake
  • The Factual Background.
  • The Judgement.
  • The Potential Consequences of a Generally Available Blake Remedy on the Orthodox Law of Contract....
• The Law of Contract De lege ferenda - The Law of contract as it should be?..
  • The Morality Approach........
  • The Economic Approach ......
  • Statement.....
  • Efficient Breach or Efficient Performance?.
    • The efficient breach theory
    • Maximizing Profit Breaches
      • Cost-related arguments
        • Allocation of the Contractual Resources
        • Transaction Costs
          • The Need to Negotiate for Release..
          • The Need to Oust the Default System .....
      • Non-cost Related Arguments
        • Who Should Make the First Move?
        • The Parties' Expectations....
        • The Non-Monetary Inconviences....
        • Disincentive to Co-operate..
        • The Impact on Third Parties..
        • Inconsistency of the theory of efficient breach with other legal institutions ..
        • The Risk of Uncompensated Losses.
    • Minimizing loss cases.
      • Example 1
      • Example 2
      • Example 3
      • Evaluation
  • Conclusion

  Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

  The primary objective of this essay is to critically examine whether Lord Hobhouse’s concern regarding the potential consequences of the Blake remedy on commercial law is justified. The essay aims to analyze the potential impact of the Blake remedy on the pre-existing law of contract, specifically focusing on the availability of remedies and the principles of efficient breach and performance.

  • The potential impact of the Blake remedy on the existing remedies in contract law.
  • The comparison between the traditional law of contract and a system incorporating the Blake remedy.
  • The efficiency of different contractual systems in terms of economic outcomes.
  • The concept of "efficient breach" and its implications for the law of contract.
  • The theoretical underpinnings and practical implications of the Blake remedy.

  Zusammenfassung der Kapitel (Chapter Summaries)

  • Introduction: Introduces the Blake case and Lord Hobhouse's warning about the potential disruptive consequences of awarding non-compensatory damages for breach of contract. The essay sets out its goal to explore the validity of this fear and examine the potential impact of the Blake remedy on the existing law of contract.
  • The Law of Contract De Lege Lata: This chapter provides an overview of the remedies available to claimants under the pre-Blake law of contract. It discusses the traditional remedies, such as compensatory damages, literal enforcement, and restitution, emphasizing the dominant role of compensatory damages.
  • A-G v Blake: This chapter summarizes the factual background and the judgment in the landmark Blake case. It explores the implications of the Blake remedy, which grants restitutionary relief in exceptional circumstances, and highlights the potential ramifications for the traditional law of contract.
  • The Law of Contract De lege ferenda: This chapter examines the law of contract from a theoretical perspective, considering both moral and economic approaches. It introduces the concept of "efficient breach," which suggests that breaching a contract can be economically beneficial in certain circumstances. The chapter explores the arguments for and against efficient breach, examining its potential implications for contractual justice and economic efficiency.

  Schlüsselwörter (Keywords)

  This essay focuses on the law of contract, particularly the remedies available for breaches of contract. It explores the concept of efficient breach, analyzes the Blake case and its potential impact on the traditional law of contract, and discusses the principles of compensatory damages, restitution, and literal enforcement. The primary themes are economic efficiency, contractual justice, and the potential for legal reform.

  Frequently Asked Questions

  What is the significance of the A-G v Blake case?

  The case introduced a restitutionary remedy for breach of contract, allowing for non-compensatory damages in exceptional circumstances.

  What are non-compensatory damages?

  Unlike traditional damages that compensate a victim's loss, these focus on stripping the contract breaker of their gains or profits.

  What is the 'efficient breach theory'?

  It is an economic theory suggesting that a party should be allowed to breach a contract if it is more economically efficient than performing it, provided the victim is compensated.

  Why did Lord Hobhouse dissent in the Blake case?

  He feared that awarding non-compensatory damages would be disruptive to commercial law and lead to a silent reconceptualisation of contract principles.

  How does the Blake remedy affect contractual justice?

  The essay evaluates whether this remedy leads to more just results compared to the traditional default system of compensatory damages.