The Immorality and Inefficiency of an Efficient Breach

Transactions: The Tennessee Journal of Business Law, Vol. 8, p. 61, 2006

42 Pages Posted: 10 Oct 2006 Last revised: 18 Mar 2009

Dawinder S. Sidhu

Georgetown University Law Center; Shook, Hardy & Bacon

Date Written: 2006

Abstract

The essay argues that this emerging contract doctrine is both immoral - principally because it degrades social cooperation and is individually dishonorable - and inefficient - in part because the generally utilized measures of efficiency ignore other costs that ultimately render an opportunistic breach inefficient and that lead to the discounting of other goods and services in a market.

Given the rise in consumer insecurity and the continuing fallout from the infectious greed of corporate entities, discussion with respect to the relationship between morality, law, and the business world is patently necessary. An analysis of this doctrine, from a moral and economic standpoint, can shed meaningful light on this evolving and often precarious relationship, and can more narrowly address whether the doctrine of efficient breach should be promoted in real life, or confined to a mere academic concept advanced by leaders of the law and economics school of thought, including Richard Posner.

Keywords: contracts, efficient breach, morality

JEL Classification: A13, D62, K00, K12

Suggested Citation

Sidhu, Dawinder S., The Immorality and Inefficiency of an Efficient Breach (2006). Transactions: The Tennessee Journal of Business Law, Vol. 8, p. 61, 2006. Available at SSRN: https://ssrn.com/abstract=936223

Dawinder S. Sidhu (Contact Author)

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Shook, Hardy & Bacon

1155 F Street NW
Suite 200
Washington, DC 20004
United States

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