The Chameleon's Dish: Against The Dual Performance Hypothesis
30 Pages Posted: 26 Jun 2016 Last revised: 21 Jun 2018
Date Written: June 13, 2018
This paper refutes the argument offered by Markovits and Schwartz for the moral permissibility of efficient breach, i.e. their argument for the dual performance hypothesis. It demonstrates that their model of contracting (the M-S model) is a “chameleon,” to use a term from Pfleiderer. Chameleons are theoretically interesting but patently unrealistic models that are used to draw real-world conclusions. The article makes use of results from both experimental and theoretical economics to undermine the assumptions made by the M-S model, showing the need for more care in applying economic models to real world moral and legal issues. In doing so, it also illuminates some of the wide variety of factors that must be considered in arguments for (or against) expectation damages as the default remedy for breach of contract.
Keywords: Contract law, Law and economics, jurisprudence
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