Fault in Contract Law
Organized by Omri Ben-Shahar, Frank and Bernice Greenberg Professor of Law, University of Chicago Law School, and Ariel Porat, Alain Poher Professor of Law, Tel-Aviv University
Fault is the central organizing principle in areas of the law that deal with liability. But surprisingly, fault is largely considered alien to contract law. Indeed, breaking a promise creates liability even in the absence of fault, and the remedies available to the victim are believed not to be dependent on the breaching party’s culpability. This fundamental idea of no fault is, and has been for ages, the dominant view in American contract law. It is boldly stated in the Restatement of Contracts, emphasized in treatises and textbooks, and taught to first-year law students in their first week of law school.
The role for fault in contract breach varies significantly across legal regimes and over time. The rise of a fault principle (and "good faith") is considered by some as one of the fundamental changes in 20th century contract law, even within Anglo-American Law. Yet despite the "underground" existence of fault jurisprudence in contract law and despite the powerful justifications for this jurisprudence, the role of fault in contract law has merited only little scholarly attention in the United States. While there are some theoretical writings on the topic of good faith, especially in Europe, the issue of fault is significantly different and has yet to be more fully explored in the context of American contract law and American Legal Theory.
This symposium reevaluates the role of fault in contract doctrine. Is it immoral to breach a contract? Should the intent ("mens rea") of the breaching party matter? Should the courts, in general, view more harshly parties’ faulty behavior? Does the idea of "efficient breach" require a no-fault regime? What is the proper role of victims’ contributory fault?
In exploring these and related issues, the symposium intends to bring together a variety of perspectives. While many of the contributions to the symposium are from experts in the study of law-and-markets, prominently utilizing the "law and economics" perspective, other views—some of which are strongly opposed to the economic approach—will also be included.
The symposium is sponsored by the University of Chicago Law School and the John M. Olin Center for Law and Economics at the University of Michigan. The papers will be published in the June 2009 issue of the Michigan Law Review. An expanded volume collection will be published later by Cambridge University Press.
Friday, September 26
4:15–5:45 Panel IV Chair: Lior Strahilevitz
Stefan Grundmann, The Fault Principle as the Chameleon of Contract Law: A Market Function Approach (download: .mp3 |