Academic

Russi on Unfair Good Faith Performance

By Lawrence Solum

Luigi Russi (Bocconi University) has posted Can Good Faith Performance Be Unfair? An Economic Framework for Understanding the Problem (Whittier Law Review, Vol. 29, No. 3, 2008) on SSRN.  Here is the abstract:

The paper deals with the duty of good faith in contract performance, as set out in the U.C.C. In particular, it focuses on the different theories as to its practical meaning, by distinguishing between two types of standards: behavioral and economic ones. The latter are further framed after the Learned Hand formula of negligence, as adapted to contractual relationships by relevant literature. By analyzing the functioning of economic standards in presence of transaction costs, it is then concluded that economic standards are only weakly preferable to behavioral ones which, under certain conditions, may prove as useful in providing a practical meaning to the good faith performance obligation.

Full post as published by Legal Theory Blog on May 29, 2008 (boomark / email).