IDEAS home Printed from https://ideas.repec.org/p/cem/doctra/179.html

A Note on the Equivalence between Contractual and Tort Liability

Author

Listed:
  • Germán Coloma
  • Sergio Pernice

Abstract

The aim of this paper is to conciliate some conclusions of the economic theories of breach of contract and tort law. The main result is that the two efficient alternatives that tort law identifies (negligence rule and strict liability with a defense of contributory negligence) are mirrored by two efficient ways of defining contract damages. The first consists of forcing the debtor to pay expectation damages but limiting the level of the creditor’s reliance (rule of damage mitigation). The second consists of obliging the debtor to pay expectation damages only when his breach of contract implies negligence, otherwise using restitution remedies (doctrines of impracticability and force majeure).

Suggested Citation

  • Germán Coloma & Sergio Pernice, 2000. "A Note on the Equivalence between Contractual and Tort Liability," CEMA Working Papers: Serie Documentos de Trabajo. 179, Universidad del CEMA.
    • Handle: RePEc:cem:doctra:179
    as

    Download full text from publisher

    File URL: https://www.ucema.edu.ar/publicaciones/download/documentos/179.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Steven Shavell, 1980. "Damage Measures for Breach of Contract," Bell Journal of Economics, The RAND Corporation, vol. 11(2), pages 466-490, Autumn.
    2. Sykes, Alan O, 1990. "The Doctrine of Commercial Impracticability in a Second-Best World," The Journal of Legal Studies, University of Chicago Press, vol. 19(1), pages 43-94, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Geest, Gerrit, 2013. "N problems require N instruments," International Review of Law and Economics, Elsevier, vol. 35(C), pages 42-57.
    2. Thomas Miceli, 2014. "The color of law: an economic theory of legal boundaries," European Journal of Law and Economics, Springer, vol. 38(2), pages 185-209, October.
    3. Miceli, Thomas J., 1995. "Contract modification when litigating for damages is costly," International Review of Law and Economics, Elsevier, vol. 15(1), pages 87-99, January.
    4. Randolph Sloof & Hessel Oosterbeek & Joep Sonnemans, 2007. "On the Importance of Default Breach Remedies," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 5-22, March.
    5. Bebchuk, Lucian Arye & Png, I. P. L., 1999. "Damage measures for inadvertant breach of contract," International Review of Law and Economics, Elsevier, vol. 19(3), pages 319-331, September.
    6. Göller, Daniel & Stremitzer, Alexander, 2014. "Breach remedies inducing hybrid investments," International Review of Law and Economics, Elsevier, vol. 37(C), pages 26-38.
    7. Schweizer, Urs, 2016. "Efficient incentives from obligation law and the compensation principle," International Review of Law and Economics, Elsevier, vol. 45(C), pages 54-62.
    8. Di Corato, Luca & Dosi, Cesare & Moretto, Michele, 2015. "Multidimensional auctions for long-term procurement contracts under the threat of early exit: the case of conservation auctions," Working Paper Series 2015:6, Swedish University of Agricultural Sciences, Department Economics.
    9. Maija Halonen-Akatwijuka & Oliver D. Hart, 2013. "More is Less: Why Parties May Deliberately Write Incomplete Contracts," NBER Working Papers 19001, National Bureau of Economic Research, Inc.
    10. Nahum D. Melumad, 1989. "Asymmetric information and the termination of contracts in agencies," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 733-753, March.
    11. Omri Ben-Shahar & Eric A. Posner, 2011. "The Right to Withdraw in Contract Law," The Journal of Legal Studies, University of Chicago Press, vol. 40(1), pages 115-148.
    12. Mehrdad Vahabi, 1999. "From Walrasian General Equilibrium to Incomplete Contracts: Making Sense of Institutions," Post-Print halshs-03704424, HAL.
    13. Brooks, Richard & Stremitzer, Alexander, 2009. "On and Off Contract Remedies," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 290, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    14. John Haltiwanger & Michael Waldman, 1983. "Interpreting Real World Contracts: An Investigation of Ex Post Mutually Beneficial Agreements," UCLA Economics Working Papers 290, UCLA Department of Economics.
    15. Friedrich L. Sell & Marcus Wiens, 2006. "Vertrauen: Substitut oder Komplement zu formellen Institutionen?," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 126(4), pages 605-633.
    16. Daniel Göller, 2014. "Expectation Damages and Bilateral Cooperative Investments," American Law and Economics Review, American Law and Economics Association, vol. 16(2), pages 473-498.
    17. Alexander Stremitzer, 2012. "Standard Breach Remedies, Quality Thresholds, and Cooperative Investments," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(2), pages 337-359.
    18. Cesare Dosi & Michele Moretto, 2015. "Procurement with Unenforceable Contract Time and the Law of Liquidated Damages," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(1), pages 160-186.
    19. Jacobi, Osnat & Weiss, Avi, 2013. "Allocation of fault in contract law," International Review of Law and Economics, Elsevier, vol. 36(C), pages 1-11.
    20. Alessandro De Chiara, 2018. "Courts' Decisions, Cooperative Investments, and Incomplete Contracts," CEU Working Papers 2018_5, Department of Economics, Central European University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cem:doctra:179. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lucila Solla (email available below). General contact details of provider: https://edirc.repec.org/data/cemaaar.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.