Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93776
Authors: 
Brooks, Richard
Stremitzer, Alexander
Year of Publication: 
2009
Series/Report no.: 
SFB/TR 15 Discussion Paper 290
Abstract: 
A party dissatisfied with the contractual performance of a counterparty is typically able to pursue a variety of legal recourses. Within this apparent variety lurk two fundamental alternatives. The aggrieved party may (i) 'affirm' the contract and seek money damages or specific performance; or (ii) 'disaffirm' the contract with the remedy of rescission and restitution. This simple dichotomy of contract remedies applies broadly in both common law and civil law practice. We show here that this remedial regime allows parties to write simple contracts that induce first-best cooperative investments.
Subjects: 
breach remedies
incomplete contracts
cooperative investments
JEL: 
K12
L22
J41
C70
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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