In defence of breach: a critique of restitution and the performance interest

Abstract

The modern argument that the law of obligations should be recast in restitutionary terms appears to have achieved its victory over contract in A‐G v Blake. Although ritual obeisance to compensatory damages is made, Blake recognises a general restitutionary remedy for breach of contract the logic of which must be to undermine completely the expectation interest. The general effect of restitutionary rather than expectation‐based remedies will be to furnish a greater deterrent against breach, a result welcomed by advocates of the ‘performance interest’. All this would be well were all breaches ‘wrongs’ which should be deterred. This, however, is not so. Breach has a positive, indeed essential, role in the operation of the law of contract as the legal institution regulating economic exchange and pursuit of its general prevention is inconsistent with the operation of a market economy. The victory of restitution therefore is illusory: it is impossible that the position established in Blake can be sustained.

Better thanFuller: A Two Interests Model of Remedies for Breach of Contract

“…For if no field of discourse other than the monotheistic religions remains dominated by a single figure to remotely the same degree as Shakespeare dominates what Harold Bloom has called ‘the western canon’, it remains the case that the understanding of the common law of remedies for breach ofcontract remains dominated by the figure of Lon Fuller. Over the forty years since what has become the argument for partial disgorgement of gains was put forward in Wrotham Park Estate Co Ltd v Parkside Homes Ltd , the English law of remedies has undergone fundamental questioning. If, in light of this, we now seek to markedly improve upon that law, we can do so only if we ask if it is possible to go beyond Fuller; to be better than Fuller.…”

Contract Theory and Gain‐Based Recovery

“…Awards measured by reference to the gain the defendant made as a result of breach are thus outside the traditional compensatory paradigm which English law adopts. Nevertheless, despite some fierce resistance, English courts appear increasingly willing to order gain‐based relief in certain exceptional cases.…”