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The Comparative Law and Economics of Penalty Clauses in Contracts

The Comparative Law and Economics of Penalty Clauses in Contracts UGO MATTEI The Comparative Law and Economics of Penalty Clauses in Contracts 1. THE PROBLEM Imagine the following monologue by a father afflicted by a severe attack of nerves. "My daughter's wedding is scheduled for next month and I'm in deep trouble. She has expressed a strong desire to hold the party in our old country house. A long time ago, I promised her that I would organize the party there. But then I forgot to make arrangements with the builders. A lot of work needs doing to th e house. There's no way she can hold the party there without the work being done. All the invitations have already been sent. If I don't get things sorted out my daughter will never speak to me again. Yesterday I rushed around looking for a building contractor. None of them could promise me tha t they'd finish the work on time. None of them ruled it out, of course, since they didn't want to loose a customer. But they made no promises. I can't take the risk because it would ruin my relationship with my daughter. I'd pay any money for the certainty. . . .". This situation of th http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Comparative Law Oxford University Press

The Comparative Law and Economics of Penalty Clauses in Contracts

American Journal of Comparative Law , Volume 43 (3) – Jul 1, 1995

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References (5)

Publisher
Oxford University Press
Copyright
© 1995 by The American Society of Comparative Law, Inc.
ISSN
0002-919X
eISSN
2326-9197
DOI
10.2307/840646
Publisher site
See Article on Publisher Site

Abstract

UGO MATTEI The Comparative Law and Economics of Penalty Clauses in Contracts 1. THE PROBLEM Imagine the following monologue by a father afflicted by a severe attack of nerves. "My daughter's wedding is scheduled for next month and I'm in deep trouble. She has expressed a strong desire to hold the party in our old country house. A long time ago, I promised her that I would organize the party there. But then I forgot to make arrangements with the builders. A lot of work needs doing to th e house. There's no way she can hold the party there without the work being done. All the invitations have already been sent. If I don't get things sorted out my daughter will never speak to me again. Yesterday I rushed around looking for a building contractor. None of them could promise me tha t they'd finish the work on time. None of them ruled it out, of course, since they didn't want to loose a customer. But they made no promises. I can't take the risk because it would ruin my relationship with my daughter. I'd pay any money for the certainty. . . .". This situation of th

Journal

American Journal of Comparative LawOxford University Press

Published: Jul 1, 1995

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