Abstract
A contract is a tool for social and economic cooperation, and adhering to contracts is a universal rule dictated by society. Contracts enable people to coexist and live better and happier lives through voluntary, mutually beneficial economic exchanges. From this perspective, the legal system supporting contracts is desirable from both economics and law perspectives. However, each country’s laws vary greatly, including their methods for addressing and remedying contract breaches. In this chapter, we attempt to clarify why Japanese and English laws differ greatly in their approaches to obligations to mitigate damages (i.e., the other party’s obligation to cooperate to reduce the liability of the breaching contractor) despite having almost identical rules regarding the scope of damages. This chapter also investigates which method is superior from the perspectives of economics and law.
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Notes
- 1.
In Japanese law, if the painting is transferred to C and cannot be reclaimed, damages become the remedy for the breach owing to the impossibility of performance (see also Sect. 7.2.1). The analysis of this case is the same as that of compensation for the expectation interest.
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Saito, A., Tanaka, H., Zasu, Y. (2021). When is Breaking a Promise Allowed? Contract Law. In: Yanagawa, T., Takahashi, H., Ouchi, S. (eds) Econo-Legal Studies. Springer, Singapore. https://doi.org/10.1007/978-981-16-5145-8_7
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DOI: https://doi.org/10.1007/978-981-16-5145-8_7
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