Reaping the Benefits of "Forbearance" in Contract Through the Doctrine of Election

Sean J. Young, Yale Law School


When a breach of contract occurs, the injured party may want to respond with “forbearance,” defined as voluntary inaction that maintains the terms of the existing contract. Forbearance maximizes the opportunities for future contracts, the returns from idiosyncratic investments, and non-economic social benefits. Yet forbearance is discouraged under the current doctrine of waiver. This Article proposes separating the doctrine of election from waiver to create a new regime that will encourage forbearance. In the process, this Article will expand the number of possible contractual regimes governing post-breach relinquishment of rights to six different regimes.