Panel 2: Contractual Remedies
Professor Martin Hogg, co-host of the Symposium and Professor of the Law of Obligations at Edinburgh Law School, introduced our esteemed panelists and moderated the second panel’s robust discussion of contractual remedies.
Chen-Wishart, Professor of the Law of Contract and Associate Dean of Graduates at Oxford University, kicked off the conversation. When Professor Chen-Wishart orders a pizza, she wants a pizza. Not damages for not getting a pizza. Thus, she asks, “why is specific performance a secondary remedy?” And further, in anticipation of counterarguments raising various bars to specific performance as a remedy, she asks, “how can I have an obligation to perform, and at the same time be barred from performing?” By way of response to these questions, Professor Chen-Wishart discussed how a central element of contract law is a “general presumption in favor of liberty,” which reflects the importance of autonomy and the ability to change one’s mind. Tying in the Symposium’s comparative theme, she noted that contract law principles in both the United States and the United Kingdom give considerable scope to “change of mind.” In this way, she found that such principles of autonomy provide a defense of the “puzzling status quo” relegating specific performance as a secondary remedy.
Another of our co-hosts, Larry A. DiMatteo, Hubert Hurst Professor of Law at the University of Florida Levin College of Law, then shifted the conversation from specific performance to liquidated damages, and the “chaotic jurisprudence” surrounding enforcement of such clauses. Professor DiMatteo observed that while the purpose of liquidated damage clauses is purportedly to avoid litigation, they in fact result in increased litigation due to the penalty rule. With a nod to Lord Hodge, Professor DiMatteo launched into an analysis of Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Ltd. v Beavis, companion cases decided by the U.K. Supreme Court in 2015, which examined the validity of penalty clauses. Professor DiMatteo advocates for the abolishment of the penalty rule altogether. Although he found the “loosening” of the penalty rule by the U.K. Supreme Court in Cavendish/ParkingEye to be “enlightening,” he suggests that the penalty rule should be abandoned and that traditional policing doctrines, such as unconscionability, should be relied upon instead. Only then can this chaotic jurisprudence, which “can be argued and manipulated by lawyers in every which way,” be resolved.
Finally, Mariana Pargendler, Professor of Law at Fundação Getulio Vargas (FGV) Law School in São Paolo and Global Associate Professor of Law at New York University School of Law, began her presentation by asking a fundamental question: do differences in contract laws around the world matter from an economic development standpoint? To her, although this question is rarely asked, the answer is unequivocally yes. While the related literatures of comparative contract law, institutional economics, and the role of contract institutions have been given thorough academic consideration, Professor Pargendler finds a notable dearth of doctrinal study on the “law in action,” or how global differences in contract law impact the ways parties do business. After providing compelling counterarguments to five identified reasons that contract law tends to be neglected in comparative studies, she illustrated how such comparisons truly matter: in Brazil, the substantive restraints imposed by local contract laws seriously discourage franchising, and have significantly changed the way that global corporations like McDonalds structure their businesses in Brazil. Ultimately, Professor Pargendler is issuing a call for academic undertakings that demonstrate how differences in contract law are not only of interest to scholars, but should also matter a great deal in practical business considerations.
With the floor open to questions, three members of the audience seized the opportunity to push the boundaries of Professor Chen-Wishart’s emphasis on the centrality of freedom of choice in contract remedies. In response to a hypothetical regarding specific performance of personal services posed by Dean Blake Morant of The George Washington University Law School, Professor Chen-Wishart explained that change of mind is only one of a number of factors a court ought to take into account when determining the appropriate remedy, and that contextuality is clearly quite important. Another audience member pointed out that other external considerations arise in the field of government contracts; there, “you must have your pizza when it’s in the public best interest to make that happen.” This, too, fits into Professor Chen-Wishart’s structure, she responded, because public policy is certainly another contextual factor informing the determination of remedy. Finally, the last audience question challenged the economic practicality of allowing people to change their minds with such abandon. Professor Chen-Wishart acknowledged the merits of this viewpoint, yet firmly stated that allowing such economic arguments weighing against autonomy and change of mind would be “really going backwards” in contractual remedy jurisprudence.
This summary was authored by Law Review Notes Editor Keturah Taylor.
