Contracts Procured Through Bribery of Public Officials: Zero Tolerance versus Proportional Liability

67 Pages Posted: 27 Jul 2018 Last revised: 7 Aug 2018

See all articles by Kevin E. Davis

Kevin E. Davis

New York University School of Law

Date Written: July 1, 2018

Abstract

Bribery in public contracting is a serious problem, particularly in societies with weak public institutions. The trend in the law applicable to contracts between governments and foreign firms is to refuse to enforce contracts procured through bribery and to bar the firm from recovery in restitution. This zero-tolerance approach may have perverse consequences. Proof that a firm obtained a contract through bribery does not necessarily indicate the extent to which the firm has fallen short of its obligations to combat bribery. The zero-tolerance approach fails to take into account the extent to which the firm has not only attempted to prevent bribery but also monitored and punished employees who engage in bribery, cooperated with law enforcement authorities, and created value for the government in the course of performing its side of the contract. Less compellingly, several commentators have complained that the zero-tolerance approach dilutes governments’ incentives to prevent their officials from soliciting bribes. Subjecting bribe-payers to liability that is proportional to fault is preferable on a number of grounds.

Suggested Citation

Davis, Kevin E., Contracts Procured Through Bribery of Public Officials: Zero Tolerance versus Proportional Liability (July 1, 2018). 50 New York University Journal of International Law and Politics (JILP); NYU Law and Economics Research Paper No. 18-22. Available at SSRN: https://ssrn.com/abstract=3221141

Kevin E. Davis (Contact Author)

New York University School of Law ( email )

40 Washington Square South
Vanderbilt Hall, Room 335
New York, NY 10012-1099
United States
212-992-8843 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
39
Abstract Views
169
PlumX Metrics