Title

Fault in Contracts: A Psychological Approach

Document Type

Article

Publication Date

2010

Abstract

Although the role of fault in contract law has traditionally received little theoretical or doctrinal attention, it is central to commonsense moral theories of contract. Most people believe that breaking a promise is wrong, and that breach of contract is a form of promise breaking. Parties' moral intuitions may affect their willingness to breach when it is otherwise efficient to do so, their ability to reach settlement once a contract has been breached, their precitions about legal rules of contract,and their post hoc assessments of appropriate damages. This chapter reviews experimental research on the effects of moral norms on contracting. Behavioral studies show that many people believe that breach of contract is a moral harm irrespective of actual losses suffered by the promisee. It is argued in the chapter that moral norms often act as default rules in legal decision making about contracts when a contingency is unspecified in the contract.

Keywords

Contracts, psychology, morality, willingness to breach, moral norms of contract

Publication Title

Fault in American Contract Law

Publication Citation

In Fault in American Contract Law 289 (Omri Ben-Shahar & Ariel Porat eds., Cambridge University Press, 2010).

Full text not available in Penn Law Legal Scholarship Repository.

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