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Altering Risks and Creating Windfalls: the Case to Abolish Intentional Interference with Contract | |
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> | revisions under progress! | | | Nathan, I've modified wording and sentence structure in several places, which I think adds to clarity and readability, but feel free to revert to the previous version if you disagree. I've also added some questions and suggestions in blue, which may be helpful as this evolves. Your argument is well-structured and well-written, and I learned something new from reading it. For me, the most difficult aspect of your paper (and its biggest area for improvement) is the fact that it is divorced from facts/social context. Your argument is very abstract and theoretical. I would like to see a concrete example of how these areas of law intersect. Some idea of where intentional interference comes into play today would be excellent (and it would also be great if this example could illustrate succinctly why you think the rule should be abolished). As I was reading, I felt like you must have some particularly egregious application of this rule in mind, and I wish you'd say what it is. I would be much more persuaded to abolish if I had a better sense of what's happening on the ground.
Introduction | |
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< | Intentional interference with contract is a unique cause of action that stands at the intersection of tort and contract law. It provides security by offering damages to actors whose contracts are intentionally interfered with by third parties. However, tort law's view of a contract as a quasi-property right meriting the protection of the law violates some of the basic tenants of contract law. Contracts are not an absolute guarantee of income; they are tools to allocate risk among willing parties who may sue for damages if the other party breaches. By providing an extra source of compensation beyond compensatory damages, the tort alters the balance of risks that were originally bargained for and creates the potential for windfalls.
Your reference in the introduction to windfalls is a bit unclear. Later you note that most of the tort damages are compensatory. Do you mean to say that the problem is that someone could "double dip" by being compensated twice for the same breach (once by the breaching party and again by the third party who interfered)? I think so, but it could be a bit clearer in the intro. | >
> | Intentional interference with contract is a unique cause of action that stands at the intersection of tort and contract law. It provides security by offering damages to actors whose contracts are intentionally interfered with by third parties. However, tort law's view of a contract as a quasi-property right meriting the protection of the law violates some of the basic tenants of contract law. Contracts are not an absolute guarantee of income; they are tools to allocate risk among willing parties who may sue for damages if the other party breaches. By providing an extra source of compensation beyond compensatory damages, the tort alters the balance of risks that were originally bargained for and creates the possibility that a party may recover twice for the same breach, which would constitute an unfair windfall. | | | Historical Development | | | Are there any more compelling reasons for tort liability? There are obvious limitations imposed by the word limit, but you present these three justifications fairly weakly and then discount them. I feel like this needs to be the strongest part of the paper, and it could use some amplificaiton. | |
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< | The most cited rationale for recognizing intentional interference as a tort is that it offers security to parties who have entered into contracts. Under this reasoning, contracts create quasi-property rights that, when violated under certain circumstances, establish a cause of action. The existence of affirmative defenses, however, undermines this logic. If the parties gain rights based upon the existence of the contract, then courts should enforce those rights equally, regardless of the way in which they are violated. | >
> | The most cited rationale for recognizing intentional interference as a tort is that it offers security to parties who have entered into contracts. Under this reasoning, contracts create quasi-property rights that, when violated under certain circumstances, establish a cause of action. The existence of affirmative defenses, however, undermines this logic. If the parties gain rights based upon the existence of the contract, then courts should enforce those rights equally. A party who interferes to promote his own economic interest and a party who interferes out of malice can both have the same effect upon the contract, regardless of motive. If courts have allowed one party to interfere, they should not deny the ability to others. | | | | |
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< | A second justification for the tort is that it increases the stability of contracts, which leads to a more efficient allocation of resources, because faith in the integrity of contracts allows parties to plan their economic activity accordingly. This claim stands in stark contrast to the efficient breach theory’s principle that “repudiation of obligations should be encouraged where the promisor is able to profit from his default after placing his promisee in as good a position as he would have occupied had performance been rendered.” (24 Rutgers L.Rev. 273, 284). If proponents of the efficient breach theory are correct, tortious interference liability may actually create inefficiency by inhibiting free maneuvering. | >
> | A second justification for the tort is that it increases the stability of contracts, which leads to a more efficient allocation of resources, because faith in the integrity of contracts allows parties to plan their economic activity accordingly. This claim stands in stark contrast to the efficient breach theory’s principle of encouraging repudiation when the promisor is able to profit from his default after placing the promisee in as good a position as he would have occupied had performance occurred. (24 Rutgers L.Rev. 273, 284). If proponents of the efficient breach theory are correct, tortious interference liability would create inefficiency by inhibiting free maneuvering. | | | Finally, the tort is sometimes justified as punishing third parties for inexcusable interference with contracts. However, most intentional interference damages are compensatory rather than punitive, which casts doubt upon this line of reasoning. Even if courts were inclined to grant large judgments for punitive damages, damages arising out of contract breach are supposed to be compensatory, not punitive, and this principle should extend to third party liability. |
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