Lucian Bebchuk and I. P. L. P'ng, "Damage Measures for Inadvertent Breach of Contract," 19 International Review of Law and Economics 319-331 (1999).
We analyze situations of inadvertant rather than deliberate breach and consider the role of alternative damages remedies. Expectation damages induce excessive reliance, while reliance damages induce excessive reliance and under-efficient precaution. Overall, expectation damages are Pareto-superior to reliance damages.
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