Jump to ContentJump to Main Navigation
Foundational Principles of Contract Law$
Users without a subscription are not able to see the full content.

Melvin A. Eisenberg

Print publication date: 2018

Print ISBN-13: 9780199731404

Published to Oxford Scholarship Online: October 2018

DOI: 10.1093/oso/9780199731404.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 23 October 2021

The Theory of Efficient Breach

The Theory of Efficient Breach

(p.51) Six The Theory of Efficient Breach
Foundational Principles of Contract Law

Melvin A. Eisenberg

Oxford University Press

Chapter 6 concerns the theory of efficient breach. This theory claims that breach of contract is efficient, and therefore desirable, if the promisor’s gain from breach after payment of the promisee’s expectation damages will exceed the promisee’s loss after recovering expectation damages. The theory rests on two factual predicates: that the expectation measure makes a promisee indifferent between performance and breach and that the promisor knows the value that the promisee places on the promisor’s performance and therefore can make the calculation the theory requires. Both predicates are incorrect. The predicate that expectation damages makes a victim of breach indifferent between performance and breach is incorrect because the expectation measure systematically fails to achieve that objective. The predicate that a promisor knows the value that the promise puts on the promisor’s performance is incorrect because rarely if ever will a promisee quantify for a promisor the gain he expects to make from a contract.

Keywords:   efficient breach, gain from breach, performance, damages, promisor, promisee

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .