Efficient breach of contract, moral constraints, and preferences for reciprocity

01 January 2018 → 31 December 2018
Research Foundation - Flanders (FWO)
Research disciplines
No data available
breach of contract
Project description

Imagine you are a sommelier. You have been asked by the "Wine Club of Antwerp" to organize a

wine tasting. You and the wine club happily agree on a payment of 2500 EUR for the evening. You

begin with your preparations. However, before the wine tasting with the wine club you are

approached by the "Ghent Wine Lovers" to organize a wine exhibition on the same evening. The

wine lovers offer you 4000 EUR for your services.

What do you do? Are you prepared to breach your contract with the wine club? After all, the wine

lovers offer 1500 EUR more than the wine club? Or do you fulfill your promise because otherwise

you would feel too guilty?

As a matter of law, the breaching contract party has to compensate the victim of breach. Does this

compensation change your considerations about breach? Does anticipating having to pay a

compensation for contract breach make you feel less guilty about breaching the contract?

The purpose of the envisaged research is to answer these questions. The hypothesis is that

compensatory money damages make it easier for the promisor to breach the contract and for the

promisee to accept contract breach. I will test this hypothesis thoroughly by employing

experimental methods in controlled laboratory studies. Understanding the dynamics and motivation

of contract breach will facilitate deriving implications for doctrinal contract law, such as the

compensation principle which is a fundamental doctrinal principle in the law of contract remedies

and tort law.