Alpa - Giampieri_ Law and Economic and Method Analisis the Contracual Damages

8/12/2019 Alpa - Giampieri_ Law and Economic and Method Analisis the Contracual Damages

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http://www.jus.unitn.it/cardozo/Review/Contract/Alpa-1995/alpa.html

Guido Alpa and Al!erto Giampieri

"ro#essor o# "rivate $aw at %niversit& o# Rome '$a (apienza'. $ecturer o# "rivate

$aw at %niversit& o# Rome '$a (apienza'.

Law and Economics and method analysis: the contractual damages issue

Contents

1. )he contractual dama*es: common principles to civil and common law.

+. )he di##erent approaches.

,. $aw and economics and voluntar& !reach.

. odels o# dama*es assessment.

5. Applica!le law.

. Conclusions.

1. The contractual damages: common principles to civil and common law.

0ith respect to the !reach o# contract it is possi!le to indicate some common principles tothe di##erent law s&stems:

2i3 the contractin* part& cannot avoid the per#ormance o# the contractual o!li*ations

without incurrin* in an& ne*ative conse4uence 2ii3 the injured part& cannot ta6e advanta*eo# the !reach !& *eneratin* a dama*e to the !reachin* part& 2iii3 the remedies to the !reach

o# contract can !e provided either !& contract 2e.*. penalt& clause etc.3 or !& the Courts2iv3 the latter include either the recover& o# dama*es or the speci#ic per#ormance 2v3 the

recover& o# dama*es includes the loss su##ered !& the injured part& as well as the loss o#*ains 2vi3 in an& case the onl& recovera!le dama*es are the #oreseea!le dama*es e7cept

#or speci#ic cases 2vii3 the moral dama*es in principle are not recovera!le 2viii3 the

injured part& should tr& to reduce the dama*es !& actin* in *ood #aith 2i73 also the injuredpart& is lia!le #or dama*es 2i.e. the dama*es incurred ma& !e reduced3 in case that same

part& contri!uted to cause them.

)his 'common core' o# contract law has !een correctl& re#lected and reproduced !&%nidroit in its "rinciples o# 8nternational Commercial Contracts 2Rome 199 ch. on-

"er#ormance3 in which the matter is divided into several *eneral rules 2(ec. 1: on-

"er#ormance in General3 and other rules related to the ri*ht to per#ormance 2(ec. +: Ri*ht to"er#ormance3 to termination 2sec. ,: )ermination3 to the recovera!le dama*es 2(ec. :;ama*es3.

(imilarl& the so-called Commission on


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>ased on the a!ove it mi*ht !e maintained that the a#oresaid common core ma& o##er the

opportunit& to create models o# economic anal&sis which ma& !e circulated that is modelswhich ma& !e suita!le #or an& law s&stem.

?owever even on the !asis o# a preliminar& anal&sis this e7perience seems to !e #rustrated

!& the di##erent approaches ta6en !& the common law&ers as opposed to the civilians and

viceversa.

2. The different approaches.

)he #irst divertin* approach the economic conse4uences o# which cannot !e addressed

herein re#ers to the criteria #or the imputation o# dama*es.

8n @rench German and 8talian law s&stems the imputa!ilit& o# contractual dama*es is!ased on ne*li*ence whereas in common law s&stems the ne*li*ence o# a !reachin* part&

is neutral.


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provide #or the possi!le relevant remedies 2such as penalt& clause termination etc.3 or

o!tain !an6 *uarantees or insurance policies etc. all the a!ove !ein* use#ul !ut e7pensiveremedies 2v3 the speci#ic per#ormance is deemed not as a residual remed& !ut as a natural

remed&.

=n the contrar& in common law s&stems the ?olmes statement: ')he dut& to 6eep a

contract at common law means a prediction that &ou must pa& dama*es i# &ou do not 6eepit - and nothin* else' 2)he "ath o# the $aw 1B9 ?arv. $. Rev. p. +3 is #undamental.

oston-

)oronto 19B+ p. B+3.

)he reasons #or this disre*ard to voluntar& !reach are several: 2i3 in common law the !reacho# contract is not *enerated !& and is not connected to ne*li*ence o# the !reachin* part&

2ii3 in common law a #actual approach prevails on a moralistic approach to the matter: an&

transaction implies certain ris6s and whoever penetrates a mar6et and operates on it must!ear the ris6 o# other parties !reaches moreover i# he allocates his products or services to

di##erent parties #or more convenient prices he is in !reach and #ul#ill the o!li*ations

underta6en with third parties 2iii3 the same mar6et rules re4uest a !etter allocation o# the

resources and there#ore the sanction imposed on the !reachin* part& is represented onl& !&the contractual remedies pursuant to the principle o# the 'e##icient !reach' 2iv3 the part&

who is not prepared to run the a!ove ris6s ma& ta6e advanta*e !& enterin* into ad hoc

clauses 2such as a penalt& clause etc.3 with the other contractin* part&.)here#ore #rom a law and economics viewpoint the a!ove position is the startin* point #or

#urther developments.

3. Law and economics and voluntary breach.

)he law and economics scholars are inspired !& ?olmes. @or e7ample "osner notes that:'0hen a !reach o# contract is esta!lished the issue !ecomes one the proper remed&. A

startin* point #or anal&sis is ?olmess view that is not the polic& o# the law to compel

adherence to contracts !ut onl& to re4uire each part& to choose !etween per#ormin* in

accordance with the contract and compensatin* the other part& #or an& injur& resultin* #roma #ailure to per#orm. )his view contains an important economic insi*ht.' 2oston-)oronto 19 p. BB3.

8n accordance with the a!ove reasonin* Cooter and %len in turn state: '0e de#ine ane##icient !reach as #ollows: a !reach o# contract is more e##icient than per#ormance o# the

contract when the costs o# per#ormance e7ceed the !ene#its to all the parties'.


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'8n summar& !reach is e##icient when as a result o# a wind#all or an accident the resources

needed #or per#ormance are more valua!le in an alternative use. 8ncentives #or !reach aree##icient when the trans#er o# resources to the hi*hest-valued use is accomplished at the

lowest transaction costs and in such a wa& that no one is made worse o## !& the trans#er and

at least one person is made !etter o##.' 2$aw and


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Alpa - Giampieri_ Law and Economic and Method Analisis the Contracual Damages