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Breach of Contract

An Economic Analysis of the Efficient Breach Scenario

  • Book
  • © 2021

Overview

Authors:
  1. Oliver Hofmann

    1. University of Hamburg, Hamburg, Germany

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  • Offers a comprehensive analysis of the efficient breach scenario
  • Explains the impact of asymmetric information, market structure and behavioral economics on the effects of different remedies for breach of contract
  • Reveals the complexity of comparison between remedies for breach of contract under realistic conditions

Part of the book series: International Law and Economics (ILEC)

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Table of contents (8 chapters)

  1. Front Matter

    Pages i-vii
    Download chapter PDF

  2. Introduction

    • Oliver Hofmann
    Pages 1-13

  3. Breach or Perform Decision: The Traditional Model of the Efficient Breach

    • Oliver Hofmann
    Pages 15-21

  4. Distributional Effects and the Original Contract

    • Oliver Hofmann
    Pages 23-47

  5. The Option to Cover

    • Oliver Hofmann
    Pages 49-66

  6. Over- and Undercompensation

    • Oliver Hofmann
    Pages 67-99

  7. Incomplete Information

    • Oliver Hofmann
    Pages 101-222

  8. Transaction Costs

    • Oliver Hofmann
    Pages 223-259

  9. Conclusion

    • Oliver Hofmann
    Pages 261-268
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Keywords

About this book

“Efficient breach” is one of the most discussed topics in the literature of law and economics. What remedy incentivizes the parties of a contract to perform contracts if and only if it is efficient? This book provides a new perception based on an in-depth analysis of the impact the market structure, asymmetry of information, and deviations from the rational choice model have, comprehensively. 

The author compares the two predominant remedies for breach of contract which have been adopted by most jurisdictions and also found access to international conventions like the Convention on Contracts for the International Sale of Goods (CiSG): Specific performance and expectation damages. The book illustrates the complexity such a comparison has under more realistic assumptions. The author shows that no simple answer is possible, but one needs to account for the circumstances. The comparison takes an economic approach to law applying game theory. The game-theoretic models are consistent throughout the entire book which makes it easy for the reader to understand what effects different assumptions about the market structure, the distribution of information, and deviations from the rational choice model have, and how they are intertwined.

Reviews

“The book provides an interesting approach to an important topic of economical analysis.” (Sergei V. Rogosin, zbMATH 1497.91005, 2022)

Authors and Affiliations

  • University of Hamburg, Hamburg, Germany

    Oliver Hofmann

About the author

Oliver Hofmann is legal engineer and an attorney-at-law, working for Noerr LLP. He studied law at the Ludwig Maximilian University of Munich (Germany) and Stellenbosch University (South Africa). He worked at an international law firm as a lawyer (2014-2016) after completing his legal apprenticeship at the Higher Regional Court Munich (2011-2013). He was a member of the DFG-Graduate School in Law & Economics at the University of Hamburg (Germany) between 2016 and 2019 and Visiting Researcher at Yale Law School (USA) in 2017.

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