Could Breach of Contract Be Immoral?
Some scholars defend the contract law’s ban on punitive damage awards on the grounds that breach of contract, in itself, is not morally wrong. In this Article, I offer two responses. First, I refute one prevalent argument of Steven Shavell’s in support of this view. Shavell argues that contractual breach is not immoral in those cases in which the legal regime would offer expectation damages because the contracting parties would not have agreed to require performance had they explicitly deliberated about the circumstances occasioning the breach. I criticize his argument for failing to justify this hypothetical-contract approach and, in any case, for failing to apply the approach properly. Second, I provide some arguments for the general default interpretation that, unless explicitly delineated otherwise, a commitment to perform, morally, entails a commitment to perform rather than a commitment to perform or pay.