Remedies For a Breach of Contract

When a contract between two parties is not fulfilled, a breach of contract can result. This can create problems for the person or business who is expecting to receive services or goods as outlined in the contract. In order to remedy a breach of contract, there are four main remedies available which include damages, specific performance, total liquidated damages, and rescission of the contract. In this essay, the different remedies for a breach of contract will be discussed and their applicability to different situations will be outlined.

The economic basis of damages for a breach of contract is an important concept in determining the legal remedies available in the event of a contractual breach. This concept was first explored in depth by JH Barton in his 1972 article in The Journal of Legal Studies. According to Barton, damages for breach of contract should be seen as an economic mechanism, rather than a primarily punitive one. He argued that damages should be used to restore the non-breaching party to the same economic position they would have been in had the contract been fully performed. This concept is based on the idea of ‘expectation damages’, which compensate the non-breaching party for the difference between the contract’s performance and its non-performance. This approach to damages for breach of contract has become the standard in many jurisdictions, as it provides an effective and efficient method for restoring the non-breaching party to a position of economic equilibrium. Thus, it is clear that JH Barton’s 1972 article was highly influential in establishing the economic basis of damages for breach of contract.

The Convention on Contracts for the International Sale of Goods (CISG) is an international treaty that seeks to harmonize the laws governing the international sale of goods between countries. In 2000, PA Piliounis published a paper in the Pace International Law Review exploring the remedies of specific performance, price reduction, and additional time (Nachfrist) under the CISG. Piliounis found that these remedies had the potential to be a worthwhile addition to the English Sales of Goods Act 1979, as they provide a more robust set of remedies for buyers and sellers. Specifically, remedies of specific performance, price reduction and additional time are beneficial for buyers, as specific performance allows for the seller to be forced to follow through on their contractual obligations, while price reduction and additional time make it easier for buyers to obtain compensation for breach of contract. Furthermore, Piliounis found that these remedies offer a greater degree of fairness to sellers as well. For example, price reduction and additional time may allow sellers to avoid the costs associated with specific performance in cases where they are unable to fulfill the contract. Ultimately, Piliounis concluded that remedies of specific performance, price reduction and additional time are worthwhile additions to English Sales of Goods Act 1979 and should be considered by parties when making international sales.

Rescission is a legal mechanism that allows for a contract to be terminated and the parties to be placed in the same position as if the contract had never been made. This is usually done if one of the parties has been deceived or misled in any way. According to S Deutch in the Israel Law Review, rescission can have a significant effect on restitutions. This is because it allows the parties to undo any agreements that were made, as if they had never been made in the first place. In cases where restitution is applicable, rescission can be used to restore the aggrieved party to the same position they were in prior to the contract. For example, if an individual was tricked into signing a contract and they later sought restitution, they could use rescission to undo the contract and receive the value of the transaction back. This would allow them to be placed in the same position that they were in before the contract was made. Rescission can therefore be a powerful tool for those seeking restitution, as it allows them to restore their position and seek compensation for any losses they may have suffered.

Economic Analysis of Contract Law has been an area of significant focus in recent years. According to S Bag, the framework of incomplete contracts and asymmetric information has provided a useful analytical platform for the analysis of contract law. It has enabled researchers to explore the incentives of parties in a contract, the degree of information asymmetry, and the impact of contract incompleteness on the behaviour of the contracting parties. This framework has proven to be relevant to both private and public sector contracts, allowing for a deeper understanding of the economic forces at play. In particular, the analysis of incomplete contracts and asymmetric information has been used to shed light on the potential for opportunism and the potential for moral hazard. It has also been used to explore the impacts of transaction costs, uncertainty, and the role of external enforcement mechanisms in the development of efficient and equitable contractual arrangements. Thus, this framework has been fundamental in providing an economic perspective on contract law.

Damages for breach of contract have long been a contentious area of legal debate. In their 2008 paper, Pearce and Halson, sought to establish a framework for understanding the three core components of damages for breach of contract: compensation, restitution and vindication. They argued that each of these three components has its own purpose and should be considered independently. Compensation was identified as a remedy designed to put the innocent party in the same financial position they would have been in had the contract not been breached. Restitution was identified as a remedy designed to take back any benefit the wrongdoer had received as a result of the breach. Finally, vindication was identified as a remedy designed to protect the innocent party’s rights and reputation. The authors concluded that while the three components of damages for breach of contract are interconnected, they should be considered separately in order to provide the most effective remedy for the innocent party.