Against Fuller and Perdue

Abstract

The 1936 article by Lon Fuller and William Perdue, "The Reliance Interest in Contract Damages," deserves its place as a classic in the history of contract theory. As a piece of substantive contracts scholarship, though, that article is several decades out of date, and (I argue here) is not even very useful as an organizing principle in teaching contract remedies. The first part of my article surveys various normative theories that have been advanced by modern scholars, to show how little any of them employ or depend on Fuller and Perdue's three-way classification between the expectation, restitution, and reliance "interests." The second part surveys the remedies case law, showing that Fuller and Perdue's classification is not even very helpful as a descriptive organizing principle: it obscures important similarities between remedies that nominally protect different "interests," and important differences among remedies that nominally protect the same "interest." I conclude that Fuller and Perdue's three-way classification -- important as it undoubtedly was in the historical development of contract theory -- is no longer a useful analytic tool, and offer some suggestions as to what might replace their classification.

JEL Classification: K12