Rethinking Contract Remedies

Felipe Jiménez

This Article offers a theoretical framework for thinking about contract remedies. The argument starts from the distinction between rights and remedies in contract law. The distinction is consistent with the doctrinal structure of contract law in Western legal systems and with the available empirical evidence regarding contractual parties’ expectations. An adequate theory of contract remedies must start by taking this distinction seriously. The Article illustrates this point through an analysis of two influential views in the American law of contract remedies: Shiffrin’s analysis of the divergence between contract and promise, and Markovits and Schwartz’s defense of expectation damages. On the basis of the right-remedy distinction, the Article argues that contract remedies have two central roles: protecting both the integrity of the practice of contracting and the individuals who engage in it. Because of these roles, there is a pro tanto reason for a certain resemblance or proportionality between remedies and the primary contractual rights they enforce. But this reason is only one of the relevant considerations in the design and evaluation of contract remedies. Once we bear in mind the distinction between rights and remedies, remedial analysis can also incorporate other morally relevant considerations beyond the central function of remedies. In order to show this, the Article offers a defense of money damages that incorporates those additional considerations. The Article, thus, offers a novel integrated framework for remedial analysis that can clarify some of the debates that have perplexed contract theorists writing about contract remedies.

Full Article.