The 2016 Reform of French Contract Law: Some Recent Developments

A gain-based remedy for breach of contract is aimed at taking away the profits acquired through breach of contract. Traditionally, contractual damages can be claimed only if the breach caused the plaintiff patrimonial loss. There is an assumption that breach of contract causes a loss to the plaintiff, and as a result the defendant should compensate the plaintiff. However, in the past, courts have been confronted with cases where the opposite of this assumption is true. This is in instances where a defendant breaches a contract and gains profit as a result of that breach, whereas the plaintiff suffers little or no patrimonial loss. Unfortunately, in these circumstances the plaintiff may be left with no remedy or legal recourse for the breach, while the defendant may keep the profits generated as a result of the breach. However, in English law the courts have recognised a gain-based remedy in the circumstances outlined above, allowing the disgorgement of such ill-gotten profits. But a similar remedy has not yet gained recognition in the South African law of contract. The purpose of this article is to explore how South African law can draw some valuable lessons from English law in developing and recognising a gain-based remedy for breach of contract in order to deal with the profits generated through breach of contract.

… The typical case in which impossibility or some related doctrine is invoked is one where, by reason of an unforeseen or at least unprovided-for event, performance by one of the parties of his obligations under the contract has become so much more costly than he foresaw at the time the contract was made as to be uneconomical (that is, the costs of performance would be greater than the benefits). The performance promised may have been delivery of a particular cargo by a specified delivery date – but the ship is trapped in the Suez Canal because of a war between Israel and Egypt. Or it may have been a piano recital by Gina Bachauer – and she dies between the signing of the contract and the date of the recital. The law could in each case treat the failure to perform as a breach of contract, thereby in effect assigning to the promisor the risk that war, or death, would prevent performance (or render it uneconomical). Alternatively, invoking impossibility or some related notion, the law could treat the failure to perform as excusable and discharge the contract, thereby in effect assigning the risk to the promisee. From the standpoint of economics – and disregarding, but only momentarily, administrative costs – discharge should be allowed where the promisee is the superior risk bearer; if the promisor is the superior risk bearer, nonperformance should be treated as a breach of contract. “Superior risk bearer” is to be understood here as the party that is the more efficient bearer of the particular risk in question, in the particular circumstances of the transaction.

On 8 May 2020, the National People’s Congress of China passed the Chinese Civil Code by incorporating the Civil Law, the Law on Property Rights, Collateral Law, Contract Law, and Tort Law. The compensation for damages in the Civil Code of China follows the regulation system of the contract law. However, it is worth noting that the Civil Code tried to resolve the legislative imperfection and uncertainty of the contract law while maintaining the legislative attitude of actively accepting international contract laws. The Civil Code of china stipulates the most representative type of remedy for breach of contract, the provisions on compensation for damages due for breach of contract, and the provisions on damages due for tort, but there are no general provisions on compensation. The Civil Code did not establish a general clause on compensation for damages, and it deals with the liability of damages within each responsibility system. This paper analyzes theories and recent precedents on the main contents, specifically the concept of damages, type of damages, scope of damages, the legal standard for calculating damages on compensation for damages caused by a breach of contract in the Chinese Civil Code. Besides, this paper aims to enhance the legal predictability of damages due to breach of contract and infer legal significance when the Chinese Civil Code becomes an applicable law in litigation and arbitration.

Previous articleNext article No AccessCost of Completion or Diminution in Market Value: The Relevance of Subjective ValueTimothy J. MurisTimothy J. Muris Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by The Journal of Legal Studies Volume 12, Number 2Jun., 1983 Sponsored by The University of Chicago Law School Article DOIhttps://doi.org/10.1086/467728 Views: 15Total views on this site Citations: 17Citations are reported from Crossref Copyright 1983 The University of ChicagoPDF download Crossref reports the following articles citing this article:Maria Bigoni, Stefania Bortolotti, Francesco Parisi, Ariel Porat Unbundling Efficient Breach: An Experiment, Journal of Empirical Legal Studies 14, no.33 (Aug 2017): 527–547.https://doi.org/10.1111/jels.12154Maria Bigoni, Stefania Bortolotti, Francesco Parisi, Ariel Porat Unbundling Efficient Breach: An Experiment, SSRN Electronic Journal (Jan 2016).https://doi.org/10.2139/ssrn.2881462Maria Bigoni, Stefania Bortolotti, Francesco Parisi, Ariel Porat Unbundling Efficient Breach, SSRN Electronic Journal (Jan 2014).https://doi.org/10.2139/ssrn.2477973Osnat Jacobi, Avi Weiss The effect of time on default remedies for breach of contract, International Review of Law and Economics 35 (Aug 2013): 13–25.https://doi.org/10.1016/j.irle.2012.11.004Jeffrey Lynch Harrison The Influence of Law and Economics Scholarship on Contract Law: Impressions Twenty-Five Years Later, SSRN Electronic Journal (Jan 2012).https://doi.org/10.2139/ssrn.1999085Francesco ParisiBarbara Luppi, and Vincy Fon Optimal Remedies for Bilateral Contracts, The Journal of Legal Studies 40, no.11 (Jul 2015): 245–271.https://doi.org/10.1086/658406Osnat Jacobi, Avi Weiss The Effect of Time on Default Remedies for Breach of Contract, SSRN Electronic Journal (Jan 2011).https://doi.org/10.2139/ssrn.2033634Benjamin E. Hermalin, Avery W. Katz, Richard Craswell Chapter 1 Contract Law, (Jan 2007): 3–138.https://doi.org/10.1016/S1574-0730(07)01001-8Francesco Parisi, Barbara Luppi, Vincy Fon Optimal Remedies for Bilateral Contracts, SSRN Electronic Journal (Jan 2007).https://doi.org/10.2139/ssrn.1020669Eleni Zervogianni Remedies for damage to property: money damages or restitution in natura?, International Review of Law and Economics 24, no.44 (Dec 2004): 525–541.https://doi.org/10.1016/j.irle.2005.01.008Todd J. Zywicki The Rise and Fall of Efficiency in the Common Law: A Supply-Side Analysis, SSRN Electronic Journal (Jan 2003).https://doi.org/10.2139/ssrn.326740Aristides N Hatzis Having the cake and eating it too: efficient penalty clauses in Common and Civil contract law, International Review of Law and Economics 22, no.44 (Dec 2002): 381–406.https://doi.org/10.1016/S0144-8188(02)00111-4Aristides N. Hatzis Having the Cake and Eating It Too: Efficient Penalty Clauses in Common and Civil Contract Law, SSRN Electronic Journal (Jan 2001).https://doi.org/10.2139/ssrn.278219Dieter Schmidtchen Time, uncertainty, and subjectivism: Giving more body to law and economics, International Review of Law and Economics 13, no.11 (Mar 1993): 61–84.https://doi.org/10.1016/0144-8188(93)90022-WPeter H. Aranson The common law as central economic planning, Constitutional Political Economy 3, no.33 (Sep 1992): 289–319.https://doi.org/10.1007/BF02393138 Daniel Friedmann The Efficient Breach Fallacy, The Journal of Legal Studies 18, no.11 (Oct 2015): 1–24.https://doi.org/10.1086/468138Louis Alessi, Robert J. Staaf Property Rights and Choice, (Jan 1989): 175–200.https://doi.org/10.1007/978-94-009-1079-9_6

Remedies for Breach of Contract in European Private Law – Principles of European Contract Law, Acquis Communautaire and Common und Frame of Reference was published in New Features in Contract Law on page 183.

Specific performance is a primary remedy for breach of contract available for the aggrieved party. This order emphasises the performance of contractual obligations. Although the plaintiff can elect to claim specific performance from the defendant, the court has a discretion to grant or decline the order of specific performance. The discretion must be exercised judicially and does not confine on rigid rules. Courts decide each case according to its own facts and circumstances. Plaintiff has a right of election whether to claim specific performance from the defendant or damages for breach of contract. The defendant does not enjoy any choice in this matter. As a general rule, specific performance is not often awarded in the contract of services. However, recent developments have demonstrated that specific performance will usually be granted in employment contracts if there is equality of bargaining power among contracting parties and such order will not produce undue hardship to the defaulting party. Public policy generally favours the utmost freedom of contract and requires that parties should respect or honour their contractual obligations in commercial transactions. Public policy is rooted in the constitution and can sparingly be used to strike down contracts. Specific performance should not continue to be a primary remedy for breach of contract. Contracting parties should be allowed to resile from the contract and use damages as a remedy for breach of contract.

A disgorgement remedy for breach of contract seeks to take away profits acquired through breach of contract. Since contractual damages only seek to compensate the plaintiff for the patrimonial loss suffered due to breach of contract, the law of contract does not generally provide for the disgorgement of profits generated through breach of contract. However, there have been circumstances where the party in breach generates profits as a result of breach contract and the other party does not suffer patrimonial loss. As a result, the plaintiff in these circumstances would not have a remedy against the defendant because he cannot prove patrimonial loss caused by the breach. However, this position is changing. The recognition of disgorgement of profits acquired through breach of contract appears to be gaining acceptance around the world. The United States of America has recognised a disgorgement remedy to take away profits acquired through breach of contract to ensure that the defendant does not gain as a result of his breach of contract. A similar remedy has not yet gained acceptance in South Africa. This study seeks to assess how the United States of America has recognised a disgorgement remedy and draw some lessons for South African law in recognising a similar remedy.

This contribution argues that motive matters in cases of breach of contract. More specifically, deliberateness of breach of contract matters in the application of remedies for breach of contract. This comparative contribution focuses on US law and English law, because the discussion on deliberate breach is most explicit in these jurisdictions. Nevertheless, references to continental European jurisdictions and to soft law instruments with a strong ‘continental’ nature such as the Principles of European Contract Law (PECL) and the Draft Common Frame of Reference (DCFR) are also included. Sometimes, in the jurisdictions and instruments mentioned, deliberateness of the breach is considered to be relevant, but more often the element of deliberateness is neglected or even denied when disappointed creditors seek remedial relief. This contribution pleads for a more consistent approach to the phenomenon of deliberate breach of contract and for improving the position of the creditor in terms of access to remedies in contract. Creditors should have easier access to performance of the contract and termination. Barriers to expectation damages in terms of burden of proof and foreseeability should be lowered. Creditors should have access to account of profits. Penalty clauses should be upheld and not be subject to mitigation in case of deliberate breach of contract, and debtors should not be able to rely on exclusion or limitation clauses in case of deliberate breach of contract.

This article provides a comparative analysis of the remedies and challenges in the protection of stakeholder rights under OHADA (Organization for the Harmonization of Business Law in Africa) and English corporate law. The study focuses on key legal remedies available to stakeholders, including the derivative action model, the unfair prejudice remedy, personal right of action, remedies for breach of contract and torts, representative actions amongst other remedies. Under OHADA, the uniform legal framework aims to harmonize business laws across member states, promoting legal certainty and economic growth. In this context, the derivative action model allows minority shareholders to seek redress for wrongs committed against the company, while the unfair prejudice remedy protects stakeholders from actions that harm their interests. Personal right of action and remedies for breach of contract and torts provide additional avenues for stakeholders to seek justice. Representative actions further enable collective redress for affected parties. In contrast, English corporate law, rooted in a common law tradition, offers flexibility and judicial interpretation in protecting stakeholder rights. The derivative action model in English law allows shareholders to bring claims on behalf of the company, while the unfair prejudice remedy addresses situations where minority shareholders are treated unfairly. Personal right of action and remedies for breach of contract and torts are well-established, providing robust protection for stakeholders. Representative actions in English law facilitate collective litigation, enhancing access to justice. In tandem with the foregoing, this paper explores challenges in the practical enforcement of these remedies, including differences in legal culture, enforcement mechanisms, and jurisdictional issues. By comparing OHADA and English corporate law, the study provides insights into the effectiveness of various legal frameworks in protecting stakeholder rights and offers recommendations for enhancing stakeholder protection through legal reforms and policy initiatives. Through a content analysis of primary and secondary data, we uphold that this article contributes to the discourse on corporate governance and stakeholder theory, offering valuable perspectives for policymakers, legal practitioners, and scholars interested in the protection of stakeholder rights in diverse legal environments.

Legal systems differ about the availability of specific performance as a remedy for breach of contract. While common law systems deny specific performance in all but exceptional cases, civil law systems generally award enforcement remedies subject to some exceptions. However, there is an ongoing debate about the extent to which the practice of litigants and courts actually reflects the doctrinal divergence. An equally lively debate revolves around the normative question: Should the injured party be entitled to enforced performance or rather content itself with monetary damages? Very few studies have used qualitative methods, vignette surveys, or incentivized lab experiments to empirically study these issues, and none has quantitatively analyzed actual court judgments. Against the backdrop of the comparative law and theoretical debates, this Article describes the findings of a quantitative analysis of judgments concerning remedies for breach of contract in Israel during a sixty-nine-year period (1948–2016). The judicial and scholarly consensus is that the Remedies Law of 1970 revolutionized Israeli law by turning enforced performance from a secondary, equitable relief to the primary remedy for breach of contract. We nevertheless hypothesized that no such revolution has actually occurred. In fact, neither the common wisdom that the resort to enforced performance has significantly increased following the 1970 Law, nor our skeptic hypothesis that no such increase has occurred, were borne out. According to our findings, the resort to enforced performance actually decreased considerably after 1970. We examine several explanations for this result, and show that this unexpected phenomenon is associated with the increasing length of adjudication proceedings. The theoretical and policy implications of these findings are discussed.

Enforced Performance vs. Damages: An Empirical Study

INTRODUCTION In Part III entitled “Sale of Goods,” the Convention provides and regulates the respective obligations and rights of the parties to an international sales contract governed by the CISG, including the remedies available to a party for breach by the other party of the latter's corresponding obligations (duties) arising under the Convention. In Chapter II, “Obligations of the Seller” (Art. 30), Sections I,“Delivery of the Goods and Handing over of Documents” (Arts. 31–34), and II, “Conformity of the Goods and Third Part Claims” (Arts. 35–44), the Convention sets forth the seller's obligations to the buyer. The buyer's remedies for the seller's breach of these obligations are set forth in Section III, “Remedies for Breach of Contract by the Seller” (Arts. 45–52). In an exercise of structural, as well as substantive, equality between the parties to the contract, in Chapter III, “Obligations of the Buyer” (Art. 53), Sections I, “Payment of the Price” (Arts. 54–59), and II, “Taking Delivery” (Art. 60), the Convention sets forth the buyer's obligations to the seller. The seller's remedies for the buyer's breach of the corresponding obligations are set forth in Section III, “Remedies for Breach of Contract by Buyer” (Arts. 61–65). The present analysis focuses on the right of a party to require the other party to perform his obligations to the former pursuant to the Convention's provisions (CISG Arts. 28, 46, and 62).

In China, a heavily discussed term concerning the remedies for breach of contract is the "liability for breach" a concept that is claimed as a "product of China". There are two notable principles governing liability for breach that have fundamental impacts on Chinese contract law in the remedies. The first is the principle of liability. The second principle is the doctrine of liability imputation. In contract law theory, two basic approaches are commonly employed as the standards to impute civil liabilities, namely the fault approach and strict liability approach. Under the Contract Law, the continuing performance will primarily apply to monetary obligation, and also available to non-monetary obligation but subject to certain limitations. In China, the mitigation duty is viewed as a fault-based duty, under which the aggrieved party will be found at fault if it fails to take reasonable action to avoid further damages that could be avoided.Keywords: Chinese contract law; contract breach; fault approach; liability imputation; mitigation duty; monetary obligation; strict liability approach

تا اوایل سدۀ حاضر در ایران و نیز بعد از انقلاب صنعتی در کشورهای صنعتی، تحولات عمده‌ای در موقعیت اجتماعی و قدرت اقتصادی طرفین قراردادهای مصرف به وجود آمده است. تنوع قراردادها، پیچیدگی بازارها، تخصصی شدن دانش تولید، عرضه و استفاده از کالاها در ظاهر دلالت بر نبود اطلاعات کامل و انتخاب معقول از طرف ضعیف قراردادها (عموما مصرف‌کننده)، دارد. دیگر، طرف‌های ضعیف معاملات تحت حاکمیت حقوق سنتی قراردادها، قادر به تأمین متعادل منافع و تعهدات خود در قرارداد و تخصیص کارآمد منابع نبوده‌اند. در واقع در چارچوب حقوق سنتی معاملات و بر مبنای اصل آزادی قراردادها، غالب معاملات و یا شروط قراردادی به‌طور نظام‌مندی به تضرر طرف ضعیف و تخصیص نا کارآمد منابع می‌انجامید. این کاستی‌ها در سطح جهان و در موارد محدودی در ایران، دولت‌ها را بر آن داشت تا در قالب شناسایی شروط ناعادلانه با وضع مقررات جدید، در قراردادهای مزبور مداخله نموده و از این راه در صدد رفع آن کاستی‌ها برآیند. کاستی‌های مزبور، در واقع همان ناتوانی نظام سنتی حقوق قراردادها در نیل به اهداف نظام‌های سیاسی و حقوقی است که ریشه در ارزش‌های بنیادین و سنت‌های فکری حاکم بر جوامع مربوطه دارند. با توجه به تعدد کاستی‌ها، ملاحظه می‌شود که دخالت دولت در قراردادهای حاوی شروط ناعادلانه بر مبانی متعددی مبتنی است که از آن جمله می‌توان به کارایی اقتصادی (تخصیص کارآمد منابع) اشاره داشت. ازاین‌رو در این مقاله سعی شده است تا با ابتنای بر مفهوم کارآمدی اقتصادی قراردادها، مقصود قانون‌گذار از شناسایی دسته‌ای از تعهدات به عنوان «شروط ناعادلانه»، مورد بررسی قرار گیرد.

This paper refers to a breach of contract which means failure to keep the promises or agreements of a contract and as a result of that breach, the one party suffers damage. First of all, this paper highlights the correlation between breach and remedy. The aim of this term paper is to explore an idea of remedies for breach of contract. This paper also looked into different types of suits, a plaintiff can file. It is just as important for the innocent party to show that it has suffered a loss as a result of the breach, and to prove what that loss is, or to establish that it should be entitled to remedy. The cost of suit for damages is in the discretion of the court. In addition to it, this paper will also discuss multiple cases relevant to the breach of contract.