The Immorality and Inefficiency of an Efficient Breach

Authors

Dawinder S. Sidhu, University of New Mexico - School of LawFollow

Document Type

Article

Publication Date

1-1-2006

Abstract

This Article attempts to analyze a concept in contract law known as the doctrine of efficient breach, which “compels [or at least encourages or invites] a party to a contract to breach if they can compensate the other party and remain better off than if they had fully performed the contract.”2 This doctrine appears to encourage immoral conduct, namely the breach of a contract. However, in the name of economic efficiency, wealth maximization, and social wealth, several prominent legal scholars, including Judge Richard A. Posner, the “leader of the school of Law and Economics movement,”3 have argued that an efficient breach is justified. In contrast, the efficient breach theory has been challenged by a number of critics, including Charles Fried.

Publication Title

Transactions: The Tennessee Journal of Business Law

Volume

8

First Page

61

Recommended Citation

Dawinder S. Sidhu, The Immorality and Inefficiency of an Efficient Breach, 8 Transactions: The Tennessee Journal of Business Law 61 (2006).
Available at: https://digitalrepository.unm.edu/law_facultyscholarship/272