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http://ssrn.com/abstract=1451123
 
 

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Breach is for Suckers


Tess Wilkinson‐Ryan


University of Pennsylvania Law School

David A. Hoffman


Temple University - James E. Beasley School of Law; Cultural Cognition Project at Yale Law School


Vanderbilt Law Review, Vol. 63, p. 1003, 2010
Temple University Legal Studies Research Paper No. 2009-33

Abstract:     
This paper presents results from three experiments offering evidence that parties see breach of contract as a form of exploitation, making disappointed promisees into “suckers.” In psychology, being a sucker turns on a three-part definition: betrayal, inequity, and intention. We used web-based questionnaires to test the effect of each of the three factors separately. Our results support the hypothesis that when breach of contract cues an exploitation schema, people become angry, offended, and inclined to retaliate even when retaliation is costly. This theory offers a useful advance insofar it explains why victims of breach demand more than similarly situated tort victims and why breaches to engorge gain are perceived to be more immoral than breaches to avoid loss. In general, the sucker theory provides an explanatory framework for recent experimental work showing that individuals view breach as a moral harm. We describe the implications of this theory for doctrinal problems like liquidated damages, willful breach, and promissory estoppel, and we suggest an agenda for further research.

Number of Pages in PDF File: 43

Keywords: contracts, breach, expectation, sucker, exploitation, reciprocity, promissory estoppel, willful breach, liquidated damages

JEL Classification: K00, C91, K12

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Date posted: August 15, 2009 ; Last revised: August 22, 2010

Suggested Citation

Wilkinson‐Ryan, Tess and Hoffman, David A., Breach is for Suckers. Vanderbilt Law Review, Vol. 63, p. 1003, 2010; Temple University Legal Studies Research Paper No. 2009-33. Available at SSRN: http://ssrn.com/abstract=1451123

Contact Information

Tess Wilkinson-Ryan
University of Pennsylvania Law School ( email )
3501 Sansom Street
Philadelphia, PA 19104
United States
David A. Hoffman (Contact Author)
Temple University - James E. Beasley School of Law ( email )
1719 N. Broad Street
Philadelphia, PA 19122
United States
215-204-0612 (Phone)
Cultural Cognition Project at Yale Law School
127 Wall St
New Haven, CT 06520
United States
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