Edited by Roger Halson and David Campbell
Chapter 26: Contract remedies as default rules
This chapter critically analyses lawyers' hard-wired tendency to treat remedies for breach of contract as compulsory rules (which parties should therefore have very limited autonomy to alter by agreement). This engrained tendency flows from a number of diverse viewpoints. Traditional common lawyers see the rules laid down by courts as repositories of practical wisdom, sanctified by judicial approval. Moral theorists of contract law see the full enforcement of promises as its goal, to which remedies are essential. Economic analysis has famously defended the common law's salient remedy for breach (expectation damages) as the efficient solution. But all of these viewpoints should be rejected. Sophisticated parties are much better able to devise appropriate rules than are the courts. Once the absence of any satisfactory dividing line between remedies and other contractual terms and obligations is realised, the case for treating all contract remedies as "default rules" is a strong one.
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