The traditional framework of United States private law that every first-year student learns is that contracts and torts are different realms – contracts is the realm of strict liability and torts of fault. Contracts, we learn from the writings of Justice Holmes and Judge Posner, are best viewed as options; they give parties the option to perform or pay damages. The question we ask is whether, in the real world, that is indeed how contracting parties view things. Using a dataset made up of one thousand mergers and acquisitions (M&A) contracts and thirty in-depth interviews with M&A lawyers, we find that there is at least one significant area of transactional practice that rejects the perspective that fault is irrelevant to contract breach.
Theresa Arnold, Amanda Dixon, Madison W Sherill, Hadar Tanne and Mitu Gulati, The Cost of Guilty Breach: Willful Breach in M&A Contracts, 62 Boston College Law Review Electronic Supplement I-32 (2021).
See also: Brian JM Quinn, Response to The Cost of Guilty Breach: What Work Is ‘Willful Breach’ Doing?, 62 Boston College Law Review Electronic Supplement I-49 (2021).