Abstract

http://ssrn.com/abstract=1405414
 
 

Footnotes (229)



 


 



Punitive Damages, Liquidated Damages, and Clauses Penale in Contract Actions: A Comparative Analysis of the American Common Law and the French Code Civil


Charles R. Calleros


Arizona State University (ASU) - Sandra Day O'Connor College of Law

2006

Brooklyn Journal of International Law, Vol. 32, 2006

Abstract:     
Although American common law allows punitive damages for reckless or intentional torts, it will neither allow a jury to assess punitive damages for breach of contract nor permit enforcement of a contractual damages clause that is deemed to be punitive. This approach is rooted in an early Chancery practice of granting equitable relief from oppressive penal bonds and has been more recently justified as a means of facilitating efficient breach. Economic efficiency, however, can be accomplished even if punitive damages could be assessed for intentional breach, because the parties would have an incentive to negotiate a release from the first contract to enable both to share in the surplus offered by an intervening contractual opportunity. Moreover, negotiation of an enforceable penalty clause would allow some parties to maximize their utility by exchanging a signal of assurance of performance for a premium fee. Additionally, the French experience invites a fresh look, because - although it generally disallows punitive damages of a judicial origin for any civil wrong, tort or breach of contract - it honors freedom of contract and the autonomy of the parties by enforcing a contractual penalty clause (although the court may reduce an excessive contractual penalty). Taking a cue from the French approach, American courts and legislatures should reconsider their refusal to sanction freely negotiated penalty clauses and enforce them to the extent that they permit the parties to maximize their collective utility.

Number of Pages in PDF File: 53

Keywords: punitive damages, contracts, comparative law

Accepted Paper Series





Download This Paper

Date posted: May 17, 2009  

Suggested Citation

Calleros, Charles R., Punitive Damages, Liquidated Damages, and Clauses Penale in Contract Actions: A Comparative Analysis of the American Common Law and the French Code Civil (2006). Brooklyn Journal of International Law, Vol. 32, 2006. Available at SSRN: http://ssrn.com/abstract=1405414

Contact Information

Charles R. Calleros (Contact Author)
Arizona State University (ASU) - Sandra Day O'Connor College of Law ( email )
Box 877906
Tempe, AZ 85287-7906
United States
Feedback to SSRN


Paper statistics
Abstract Views: 900
Downloads: 60
Download Rank: 220,773
Footnotes:  229

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.250 seconds