Abstract

Fuller and Perdue's famous article tried to shift the emphasis from the interest which is the core of contract law, namely, the interest in the performance of the contract, to losses suffered in reliance on the contract. This attempt had hardly any effect on substantive law. The article also aimed to introduce new terminology and this effort succeeded dramatically.

The Comment argues that:

1) The terminology used by Fuller and Perdue, in particular the term "Expectation Interest" is inappropriate.

2) The only genuine contractual interest is the "Performance Interest". The inappropriate term introduced by Fuller and Perdue to describe it, namely, "Expectation Interest" reflects their attempt to belittle the interest which constitutes the very core of contract law.

3) The attack by Fuller and Perdue upon the perfor-mance interest was bound to fail. The essence of contract is performance and the ample protection granted to the performance interest is likely to be main-tained and possibly expanded as long as contract law as we know it remains.

4) The basic assumption that there exists a fundamental distinction between the measure of damages in contract and tort (reliance damages are supposed to represent "the tort principle") is erroneous. The distinction between tort and contract derives from the fundamental function of contract law, namely, the recognition and the ordering of entitlements created by the parties' binding promises. The disparity between contract and tort relates to the cre-ation of rights and obligations rather than to the principles of measur-ing their value for the purpose of damages. Where they are invoked to protect the same right (e.g. in case of interference with contractual relations), the calculation of damages, which reflect the value of this right, either in tort or in contract will be similar.

Recommended Citation

Daniel Friedmann, "A Comment on Fuller and Perdue, the Reliance Interest in Contract Damages" Issues in Legal Scholarship, Symposium: Fuller and Perdue (2001): Article 3.
http://www.bepress.com/ils/iss1/art3