Why Breach of Contract May Not Be Immoral Given the Incompleteness of Contracts

23 Pages Posted: 3 Apr 2009  

Steven Shavell

Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: March 1, 2009

Abstract

There is a widely held view that breach of contract is immoral. I suggest here that breach may often be seen as moral, once one appreciates that contracts are incompletely detailed agreements and that breach may be committed in problematic contingencies that were not explicitly addressed by the governing contracts. In other words, it is a mistake generally to treat a breach as a violation of a promise that was intended to cover the particular contingency that eventuated.

JEL Classification: K12

Suggested Citation

Shavell, Steven, Why Breach of Contract May Not Be Immoral Given the Incompleteness of Contracts (March 1, 2009). Harvard Law and Economics Discussion Paper No. 631. Available at SSRN: https://ssrn.com/abstract=1372170 or http://dx.doi.org/10.2139/ssrn.1372170

Steven Shavell (Contact Author)

National Bureau of Economic Research (NBER)

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Harvard Law School ( email )

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