The Myth of Efficient Breach: New Defenses of Expectation Interest

Alan Schwartz, Yale Law School

Abstract

Contract remedies have long sought to protect the gains that parties contract to realize. Although the Restatement recognizes three distinct contractual interests–expectation, reliance, and restitution–it expressly privileges the expectation interest over the other two. Courts "[o]rdinarily ... enforce[] the broken promise by protecting the expectation that the injured party had when he made the contract."