Consequential Damages in Contract

Specific Performance versus Damages for Breach of Contract

When would parties to a contract want performance to be specifically required, and when would they prefer payment of money damages to be the remedy for breach? This fundamental question is studied here, and an answer is provided that is based on a simple distinction between contracts to produce goods and contracts to convey property. Setting aside qualifications, the conclusion for breach of co...

Contract Renegotiation, Mechanism Design, and the Liquidated Damages Rule

Altbach/Deizisau CHP plant: Integrating early fault detection minimizes consequential damages

The Plant The Altbach/Deizisau CHP plant ensures reliable, economical and environmentally-friendly power supply. EnBW operates several plants at the site with a total output of around 1,200 MW, including the 476 MW coal-fired block HKW 1. The district heating generated supplies a considerable proportion of the industrial enterprises in Esslingen and Stuttgart, as well as private households in t...

Contract Structure for Joint Production: Risk and Ambiguity Under Compensatory Damages

We develop a model in which the parties to a joint production project have a choice of specifying contractual performance in terms of actions or deliverables. Penalties for noncompliance are not specified; rather, they are left to the courts under the legal doctrine of compensatory damages. We analyze three scenarios of increasing uncertainty: Full Knowledge – where implications of partner acti...

Liquidated Damages in California