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FAULT IN AMERICAN CONTRACT LAW
Representing an unprecedented joint effort from top scholars in the field, this volume collects original contributions to examine the fundamental role of “fault” in contract law. Is it immoral to breach a contract? Should a breaching party be punished more harshly for willful breach? Does it matter if the victim of breach engaged in contributory fault? Is there room for a calculus of fault within the “efficient breach” framework?
For generations, contract liability has been viewed as a no-fault regime, in sharp contrast to tort liability. Is this dichotomy real? Is it justified? How do the American and European traditions compare? In exploring these and related issues, the essays in this volume bring together a variety of outlooks, including economic, psychological, philosophical, and comparative approaches to law.
Omri Ben-Shahar is the Frank and Bernice Greenberg Professor of Law at the University of Chicago. He has written extensively in the areas of contract law, products liability, and law and economics. Ben-Shahar is the editor of the
Journal of Legal Studies and, recently, the book Boilerplate: Foundation of Market Contracts.
Ariel Porat is Alain Poher Professor of Law in Tel-Aviv University’s Faculty of Law and its former Dean, as well as Fischel-Neil Distinguished Visiting Professor of Law at the University of Chicago. Porat has written numerous articles in the areas of torts and contracts and is the author of the books Contributory Fault in the Law of Contracts and Tort Liability under Uncertainty (with Alex Stein).
FAULT IN AMERICAN CONTRACT LAW
Edited by
OMRI BEN-SHAHAR
University of Chicago Law School
ARIEL PORAT
Buchmann Faculty of Law, Tel-Aviv University
CAMBRIDGE UNIVERSITY PRESS
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Cambridge University Press
The Edinburgh Building, Cambridge CB2 8RU, UK
Published in the United States of America by Cambridge University Press, New York
www.cambridge.org
Information on this title: www.cambridge.org/9780521769853
© Cambridge University Press 2011
This publication is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press.
First published in print format 2010
ISBN-13 |
978-0-511-90241-3 |
eBook (NetLibrary) |
ISBN-13 |
978-0-521-76985-3 |
Hardback |
Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate.
To our parents, Yael and Habash
– O.B.S
Adina and Haim
– A.P.
CONTENTS
List of Contributors |
page ix |
Preface |
xi |
Acknowledgment |
xxi |
I. The Case for Strict Liability |
|
1. Richard A. Posner, Let Us Never Blame a Contract Breaker |
3 |
2. Robert E. Scott, In (Partial) Defense of Strict Liability in Contract |
20 |
3.Stefan Grundmann, The Fault Principle as the Chameleon of
|
Contract Law: A Market Function Approach |
35 |
|
II. The Case for Fault |
|
4. |
George M. Cohen, How Fault Shapes Contract Law |
53 |
5. |
Eric A. Posner, Fault in Contract Law |
69 |
6.Melvin Aron Eisenberg, The Role of Fault in Contract
Law: Unconscionability, Unexpected Circumstances, |
|
Interpretation, Mistake, and Nonperformance |
82 |
III.Between Strict Liability and Fault
7. |
Roy Kreitner, Fault at the Contract-Tort Interface |
101 |
8.Richard A. Epstein, The Many Faces of Fault in Contract
Law: Or How to Do Economics Right, Without Really Trying |
118 |
9.Martha M. Ertman, The Productive Tension Between Official
and Unofficial Stories of Fault in Contract Law |
132 |
vii
viii • Contents
|
IV. Willful Breach |
|
10. |
Richard Craswell, When Is a Willful Breach “Willful”? The |
|
|
Link Between Definitions and Damages |
147 |
11. |
Steve Th el and Peter Siegelman, Willful Breach: An |
|
|
Efficient Screen for Efficient Breach |
161 |
12. |
Oren Bar-Gill and Omri Ben-Shahar, An Information |
|
|
Theory of Willful Breach |
174 |
13. |
Barry E. Adler, Contract Law and the Willfulness Diversion |
190 |
V. Comparative Fault
14. |
Ariel Porat, A Comparative Fault Defense in Contract Law |
207 |
15. |
Saul Levmore, Stipulated Damages, Superstrict Liability, |
|
|
and Mitigation in Contract Law |
223 |
16. |
Fabrizio Cafaggi, Creditor’s Fault: In Search of |
|
|
a Comparative Frame |
237 |
|
VI. The Morality of Breach |
|
17. |
Steven Shavell, Why Breach of Contract May Not Be |
|
|
Immoral Given the Incompleteness of Contracts |
257 |
18. |
Dori Kimel, Fault and Harm in Breach of Contract |
271 |
19. Tess Wilkinson-Ryan, Fault in Contracts: A |
|
|
|
Psychological Approach |
289 |
Case Index |
305 |
|
Subject Index |
309 |
|
CONTRIBUTORS
Barry E. Adler
Bernard Petrie Professor of Law
and Business,
New York University
Oren Bar-Gill
Professor of Law,
New York University School of Law
Omri Ben-Shahar
Frank and Bernice J. Greenberg
Professor of Law,
University of Chicago Law School
Fabrizio Cafaggi
Professor of Comparative Law,
EUI Florence
George M. Cohen
Brokaw Professor of Corporate Law,
Barron F. Black Research Professor,
University of Virginia School of Law
Richard Craswell
William F. Baxter Visa International
Professor of Law,
Stanford University
Melvin Aron Eisenberg
Koret Professor of Law,
University of California, Berkeley,
School of Law (Boalt Hall);
Stephen and Barbara Friedman
Visiting Professor of Law,
Columbia Law School
Richard A. Epstein
James Parker Hall Distinguished
Service Professor of Law,
University of Chicago School of Law;
Peter and Kirsten Bedford
Senior Fellow,
Th e Hoover Institution;
Visiting Professor of Law,
New York University
School of Law
Martha M. Ertman
Carole and Hanan Sibel
Research Professor,
University of Maryland Law School
Stefan Grundmann
Professor of Private
and Business Law,
German, European and International
Department,
Humboldt-Universität, Berlin
Dori Kimel
Fellow of New College and Reader in
Legal Philosophy,
University of Oxford
ix
x • Contributors
Roy Kreitner
Faculty of Law,
Tel Aviv University
Saul Levmore
William B. Graham Professor of Law,
University of Chicago Law School
Ariel Porat
Alain Poher Professor of Law,
Tel Aviv University;
Fischel-Neil Distinguished Visiting
Professor of Law,
University of Chicago Law School
Eric A. Posner
Kirkland and Ellis Professor of Law,
University of Chicago Law School
Richard A. Posner
Judge, U.S. Court of Appeals for the Seventh Circuit;
Senior Lecturer, University of Chicago Law School
Robert E. Scott
Alfred McCormack Professor of Law and Director,
Center for Contract and Economic Organization,
Columbia University
Steven Shavell
Samuel R. Rosenthal Professor of Law
and Economics,
Harvard Law School
Peter Siegelman
Roger Sherman Professor of Law,
University of Connecticut School of
Law
Steve Th el
I. Maurice Wormser Professor of Law, Fordham Law School
Tess Wilkinson-Ryan
Assistant Professor of Law,
University of Pennsylvania Law
School