The John M. Olin Center
Paper Abstract
631. Steven Shavell, Why Breach of Contract May Not Be Immoral Given the Incompleteness of Contracts, 3/2009; subsequently published in Michigan Law Review, Vol. 107, 2009, 1569-1582.
There is a widely held view that breach of contract is immoral. I suggest here that breach may often be seen as moral, once one appreciates that contracts are incompletely detailed agreements and that breach may be committed in problematic contingencies that were not explicitly addressed by the governing contracts. In other words, it is a mistake generally to treat a breach as a violation of a promise that was intended to cover the particular contingency that eventuated.