Enforcing Bilateral Promises: A Comparative Law and Economics Perspective

29 Pages Posted: 9 Jan 2012  

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Marta Cenini

University of Milan - Faculty of Law

Barbara Luppi

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics; University of St. Thomas School of Law

Date Written: January 9, 2012

Abstract

Parties often exchange promises of future performance with one another. Legal systems frame and regulate contracts involving the exchange of bilateral promises of future performance differently from one another. Two conceptual and practical questions often arise in these bilateral situations. Should a breaching promisor be allowed to force the performance of his non-breaching promisee? Should a breaching party be able to collect damages in a contract if his counterpart was also in breach? This paper examines these interrelated questions from a comparative law and economics perspective. We consider contracts in which parties make reciprocal promises of performance and study the incentives created by applying a defense of non-performance in unilateral breach cases and the “plaintiff in default” preclusion rules in bilateral breach cases.

Keywords: Bilateral Contracts, Reliance, Remedies for Breach, Defense of Non-Performance, Plaintiff in Default, Preclusion Rules

JEL Classification: K12, K41

Suggested Citation

Parisi, Francesco and Cenini, Marta and Luppi, Barbara, Enforcing Bilateral Promises: A Comparative Law and Economics Perspective (January 9, 2012). Minnesota Legal Studies Research Paper No. 12-03. Available at SSRN: https://ssrn.com/abstract=1981988 or http://dx.doi.org/10.2139/ssrn.1981988

Francesco Parisi (Contact Author)

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Marta Cenini

University of Milan - Faculty of Law ( email )

Via Festa del Perdono, 7
20122 Milano
Italy

Barbara Luppi

Università degli studi di Modena e Reggio Emilia (UNIMORE) - Faculty of Business and Economics ( email )

Viale Berengario 51
41100 Modena, Modena 41100
Italy

University of St. Thomas School of Law

2115 Summit Avenue
Saint Paul, MN 55105
United States

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