A Unifying Theory of Contract Damages

Abstract:     
This article justifies a reformulation of modern contract damage rules articulated in a new restatement of contract damages, see Barnes and Zalesne, The Shadow Code, 56 SOUTH CAROLINA L. REV. 93 (2004). The unifying principles of the surplus-based approach offered here lies in the shadows of contract remedies as articulated in Article 2 of the Uniform Commercial Code (U.C.C.), the Restatement (Second) of Contracts. The Shadow Code presented in this Article combines these principles and formulas into a new image of legal remedies for contract breach. This reconceptualization is based on the foundational principle that parties injured by contract breach are entitled to any surplus of benefits over costs those parties would have realized had the breaching parties performed. The Shadow Code reflects the modern understanding that damages are intended to ensure that the injured party is as well off as if the other party had performed as promised.

Number of Pages in PDF File: 49

Keywords: contract law, remedies, contract damages, Uniform Commercial code, Restatement of Contracts, contract breach

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