Incomplete contracts with asymmetric information: exclusive versus optional remedies

• Autores: Ronen Avraham, Zhiyong Liu
• Localización: American law and economics review, ISSN 1465-7252, Vol. 8, Nº. 3, 2006, págs. 523-561
• Idioma: inglés
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• Resumen

  • Scholars have been debating for years the comparative advantage of damages and specific performance. Yet, most work has compared a single remedy contract to another single remedy contract. But contract law provides the non-breaching party with a variety of optional remedies to choose from in case of a breach, and parties themselves regularly write contracts which provide such options. In this article, we start filling this gap by studying multi-remedy contracts. Specifically, we compare a contract that grants the non-breaching party an option to choose between liquidated damages and specific performance with an exclusive remedy contract, which restricts the non-breaching party¿s remedy to liquidated damages only.