March 2007, Volume 93, Issue 1|
The Missing Interest: Restoration of the Contractual Equivalence
93 Va. L. Rev. 59 (2007)
The analysis of contract remedies is dominated by Fuller and Perdue’s classification of the interests protected by remedies: expectation, reliance, and restitution. This Article argues that in many instances courts and legislatures award remedies that do not aim at any of these interests, but rather aim at another interest, namely, restoration of the contractual equivalence.
Restoration remedies strive to put the injured party in a position similar to the one she would have occupied had the parties made (and performed) a contract in which their obligations were adjusted to the actual performance by the breaching party, while maintaining the contractual equivalence in terms of the agreed value of performance, the chronological relation between their respective obligations, etc. Thus, for example, restoration remedies may put a buyer in a monetary position similar to the one she would have occupied had the contract referred to a smaller parcel of land, to goods of inferior quality, or to delivery at the (belated) time in which the goods were actually delivered.
The Article demonstrates that restoration of the contractual equivalence is a distinctive goal of contract remedies and explores its relations with the familiar interests. Surveying contract doctrines, it shows that various remedies for partial, defective or delayed performance are best understood as aiming at restoring the contractual equivalence. It argues that protection of the restoration interest is justified by various theories of contract law, including the will theory, corrective and distributive justice, economic efficiency, and contract as cooperative relationship. The Article proposes to make restoration remedies more systematically and generally available to the injured party.
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