Lloyd's Maritime and Commercial Law Quarterly
Proprietary modes of protecting the performance interest in contract
P G Turner *
This paper addresses a question of contract law closely associated with the writings of Mr Justice Holmes. Does a contract party have a legally recognised interest in the performance of contractual promises she is owed? Holmes thought not, since the only “universal” consequence of a breach of contract was that the defaulting party would be obliged to pay damages. But Holmes assumed that contractual remedies alone constitute the sole measure of a contract party’s performance interest. This paper contests that assumption. By showing the ways in which rules and concepts of property law protect the performance interest, the paper argues that the performance interest is to be measured also through an assessment of rules of substantive law that apply before the remedial stage of analysis.
I. INTRODUCTION
Those who contract with one another have an interest in their contract’s being performed. Rules and principles of law protect and give effect to this “performance interest”,1 most obviously through awards of damages for breach and orders for the contract’s performance. But there are also other, proprietary modes of protecting the performance interest in contract. This paper offers an account of the main proprietary modes in order to open up a new perspective on the legal status of the performance interest in English contract law.2
That perspective may be described as follows. A contract party’s performance interest is not to be measured exclusively by assessing the kind or extent of practical relief that is given for a threatened or actual breach of contract in a particular case. It is also to be assessed by examining rules of substantive law that apply before the remedial stage of analysis. This position is unconventional in that discussion of the performance interest usually assumes the contrary. The contrary is assumed, for example, in the conclusion
* Fellow of St Catharine’s College, Cambridge. This is a revised version of a paper given at the Property Law & Theory Colloquium, George Mason University Law School, in July 2011. I am grateful for the comments of Cristián Banfi, Calum Carmichael, Matthew Conaglen, Hanoch Dagan, Avihay Dorfman, Eilís Ferran, David Fox, Richard Nolan, James Penner, Fiona Roughley, Solène Rowan, Henry Smith, Greg Tolhurst, Jason Varuhas and Graham Virgo. The normal disclaimer applies.
1. D Friedmann, “The Performance Interest in Contract Damages” (1995) 111 LQR 628, 629.
2. Many of the arguments made will apply equally to other common law jurisdictions.
LLOYD’S MARITIME AND COMMERCIAL LAW QUARTERLY
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