Aitor Sevillano Orbegozo (Aitor Sevillano – Legal Services) has posted The Mechanics of Opportunism: Hobbesian Anthropology and the Legal Economics of Efficient Breach on SSRN. Here is the abstract:
The theory of efficient breach holds that a party to a contract may reasonably decide not to perform if the benefits of breaching, after paying expectation damages, exceed the benefits of performing. Law-and-economics scholars support this idea as a way to improve how resources get allocated. However, this article argues that the doctrine assumes a certain view of human behaviour. When compared to Thomas Hobbes’s ideas about agreements, self-interest, and coercion, efficient breach sees contract performance as a matter of calculation, not as a moral duty. This article looks at how efficient breach changes breach of contract from a moral wrong to a legal option with a price, and considers whether this alteration may weaken the trust and relationships which support long-term market cooperation.
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