Limitations imposed on contract breaker Formal recognition that a party has been wronged Restitution Incarceration what constitutes a promise worthy of legal sanction expectations practical problems: too many trivial matters for courts to decide context promises made under duress intentions and/or previous actions establishment of substantial harm reasonable person standard Remedies for breach of promise Damages - The Basics PURPOSE MEASURE JUSTICE INTEREST ways to moral underpinnings and measure social purpose damages Benefit to defendant. Backward Restitution Prevent unjust enrichment Corrective looking (cannot “steal” from another by breaching) Loss to plaintiff. Backward Reliance Undoing the harm. Like Restorative looking. Puts plaintiff into position insurance, encourages people as though promise never made i.e. to rely on promise, since restore status quo. Includes resulting losses compensated restitution. $$ = what P started with what P ended up with. – Secure benefit. Treat as Expected benefit. Forward Expectation Distributive i.e. in the looking. Puts plaintiff into position “money bank”. re-distributes Encourages keeping of would have been if promise had [DEFAULT assets from point contracts, compensates lost been kept, as far as money can do. MEASURE] of time the opportunities. Hence Also sometimes court-ordered contract was promotes free-market specific performance. $$ = what P made i.e. capitalist credit economy and would have ended up with what – long complex chains of P actually ended up with transactions. Punish / Deter. Almost Punitive Loss plus. Retributive unknown, hence encourages economically efficient breaches
Limitations imposed on contract breaker Formal recognition that a party has been wronged Restitution Incarceration what constitutes a promise worthy of legal sanction expectations practical problems: too many trivial matters for courts to decide context promises made under duress intentions and/or previous actions establishment of substantial harm reasonable person standard Remedies for breach of promise Damages - The Basics INTEREST ways to measure damages PURPOSE moral underpinnings and social purpose MEASURE JUSTICE Restitution Prevent unjust enrichment (cannot “steal” from another by breaching) Benefit to defendant. Backward looking Corrective Reliance Undoing the harm. Like insurance, encourages people to rely on promise, since resulting losses compensated Loss to plaintiff. Backward looking. Puts plaintiff into position as though promise never made i.e. restore status quo. Includes restitution. $$ = what P started with – what P ended up with. Restorative Expectation [DEFAULT MEASURE] Secure benefit. Treat as “money in the bank”. Encourages keeping of contracts, compensates lost opportunities. Hence promotes free-market capitalist credit economy and long complex chains of transactions. Expected benefit. Forward looking. Puts plaintiff into position would have been if promise had been kept, as far as money can do. Also sometimes court-ordered specific performance. $$ = what P would have ended up with – what P actually ended up with Distributive i.e. re-distributes assets from point of time the contract was made i.e. Punitive Punish / Deter. Almost unknown, hence encourages economically efficient breaches Loss plus. Retributive