Guido Alpa* and Alberto Giampieri**

Law and Economics and method analysis: the contractual damages issue


1. The contractual damages: common principles to civil and common law.

With respect to the breach of contract, it is possible to indicate some common principles to the different law systems:

(i) the contracting party cannot avoid the performance of the contractual obligations without incurring in any negative consequence; (ii) the injured party cannot take advantage of the breach by generating a damage to the breaching party; (iii) the remedies to the breach of contract can be provided either by contract (e.g., penalty clause, etc.) or by the Courts; (iv) the latter include either the recovery of damages or the specific performance; (v) the recovery of damages includes the loss suffered by the injured party, as well as the loss of gains; (vi) in any case, the only recoverable damages are the foreseeable damages, except for specific cases; (vii) the moral damages, in principle, are not recoverable; (viii) the injured party should try to reduce the damages by acting in good faith; (ix) also the injured party is liable for damages (i.e., the damages incurred may be reduced), in case that same party contributed to cause them.

This "common core" of contract law has been correctly reflected and reproduced by Unidroit in its Principles of International Commercial Contracts (Rome, 1994, ch. 7, Non-Performance), in which the matter is divided into several general rules (Sec. 1: Non-Performance in General) and other rules related to the right to performance (Sec. 2: Right to Performance), to termination (sec. 3: Termination), to the recoverable damages (Sec. 4: Damages).

Similarly, the so-called Commission on European Contract Law, directed by Ole Lando, has drafted some common rules to different law systems (see, Towards a European Civil Code, Dordrecht, Boston, London, 1994; The Principles of European Contract Law, Lando and Beale eds., London, 1994).

Based on the above, it might be maintained that the aforesaid common core may offer the opportunity to create models of economic analysis which may be circulated, that is models which may be suitable for any law system.

However, even on the basis of a preliminary analysis, this experience seems to be frustrated by the different approaches taken by the common lawyers as opposed to the civilians, and viceversa.


* Professor of Private Law at University of Rome "La Sapienza". ** Lecturer of Private Law at University of Rome "La Sapienza".