This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Cost of Compensation: Revisiting Contract Remedies in Repeat Play Settings

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Omri Ben-Shahar (University of Michigan Law School)
Abstract

Legal rights may erode as a result of past, uncontested, breach. In light of ongoing violations, the rightholder's enforcement may result in the loss of the entitlement. The doctrines, of course, of performance in contract law and adverse possession in property law are prominent examples of this widespread erosion phenomenon. In analyzing the effects of such laws, the Article confronts two conflicting intuitions. On the one hand, the "license" to continue breach prospectively encourages opportunism. On the other hand, the risk of erosion may reinforce the rightholder's motivation to take anti-erosion measures, bolstering the credibility of the threat to enforce, thus better preserving the entitlement. The article proves that these two effects of erosion rules always balance out. The same amount of value will be extracted from the right holder irrespective of the law's erosion doctrine. The article also demonstrates the limits of this "irrelevance" claim and the factors that may lead to its collapse. It applies the analysis to offer new perspectives on various prominent legal rules.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1124&context=blewp
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Berkeley Olin Program in Law & Economics in its series Berkeley Olin Program in Law & Economics, Working Paper Series with number 1124.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 29 Sep 1999
Date of revision:
Handle: RePEc:cdl:oplwec:1124

Note: oai:cdlib1:blewp-1124
Contact details of provider:
Postal: Boalt Hall, Berkeley, CA 94720
Fax: (510) 642-3767
Email:
Web page: http://repositories.cdlib.org/blewp/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn. [Downloadable!] (restricted)
  2. Bebchuk, Lucian Arye, 1988. "Suing Solely to Extract a Settlement Offer," Journal of Legal Studies, University of Chicago Press, vol. 17(2), pages 437-50, June.
    Other versions:
  3. Shavell, Steven, 1992. "Liability and the Incentive to Obtain Information about Risk," Journal of Legal Studies, University of Chicago Press, vol. 21(2), pages 259-70, June.
  4. Bebchuk, Lucian Arye, 1996. "A New Theory Concerning the Credibility and Success of Threats to Sue," Journal of Legal Studies, University of Chicago Press, vol. 25(1), pages 1-25, January.
Full references

Statistics
Access and download statistics

Did you know? Authors can create their own profile with links to their works on the RePEc Author Service.

This page was last updated on 2009-12-9.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.