David Dryselius
Senior lecturer
Avtalsviten : effekter och rättsverkningar
Author
Summary, in English
This thesis concerns the legal consequences and the economic effects of the use of a damages clause (avtalsvite). Starting from a rather routinely picture in the legal literature, the thesis seeks to establish a more sophisticated application of the clause, in order to maximize the parties total utility.
Thanks to their long-standing use, there is a generally accepted picture of what damages clause are, but, in fact, this picture turned out to be an insufficient basis for the deeper understanding at which this thesis aims. To pursue this understanding, the thesis starts off by defining what is required for an obligation to be classified as a damages clause; that the obligation in the damages clause must not be conditional on anything else than non-fulfilment of the main obligation of the clause. With this definition, a number of problems could be solved. The solution in the literature implied the application of default rules, in order to fill out the damages clause. In the thesis, however, the clause blocks the application of default rules, since the application of the latter presupposes a legal gap that – by way of the definition of the damages clause – does not exist.
The legal effect of the clause is in itself straightforward; a monetary claim with a certain content arises. What is more complicated is the way in which the damages clause affects the application of the background law governing breach of contract that would otherwise be applicable. The damages clause has an obvious connection to damages according to the expectation interest, since it is this compensation that is actualized in the event of a breach of a contractual obligation if the agreement does not contain any damages clause. This connection had, therefore, to be investigated, and it became central to the understanding of damages clauses adopted in the thesis. Another crucial part of the thesis consists of an extended use of the reliance interest. In this part, especially with its relation to when the damages clause’s main obligation is invalid, Iargue that the compensation that has been granted in the case law, stems from an application of a non-contractual obligation.
Another central question for the thesis, which has been discussed since the middle of the nineteenth century, is the relationship between damages clauses and damages according to default rules. Damages according to the clause must always be paid, on the basis of the principle of the binding contract. The question is whether a damages clause affects the right to damages according to the default rules. The tendency in the second half of the twentieth century was to say that the damages clause is exclusive. In investigating this issue, this thesis had to take into account recent cases from the Swedish Supreme Court. My reading of these latter cases is that the background law does not contain any rule that governs the relationship between a damages clause and awarding damages according to the background law.
In the final two chapters, the thesis argues that the parties, in order to maximize their total utility, should use an exclusive damages clause and that the amount specified in the clause should be as close as possible to the expectation interest. This amount may then need to be adjusted to take account of any reliance expenditure and the parties’ attitude towards bearing the risk.
Thanks to their long-standing use, there is a generally accepted picture of what damages clause are, but, in fact, this picture turned out to be an insufficient basis for the deeper understanding at which this thesis aims. To pursue this understanding, the thesis starts off by defining what is required for an obligation to be classified as a damages clause; that the obligation in the damages clause must not be conditional on anything else than non-fulfilment of the main obligation of the clause. With this definition, a number of problems could be solved. The solution in the literature implied the application of default rules, in order to fill out the damages clause. In the thesis, however, the clause blocks the application of default rules, since the application of the latter presupposes a legal gap that – by way of the definition of the damages clause – does not exist.
The legal effect of the clause is in itself straightforward; a monetary claim with a certain content arises. What is more complicated is the way in which the damages clause affects the application of the background law governing breach of contract that would otherwise be applicable. The damages clause has an obvious connection to damages according to the expectation interest, since it is this compensation that is actualized in the event of a breach of a contractual obligation if the agreement does not contain any damages clause. This connection had, therefore, to be investigated, and it became central to the understanding of damages clauses adopted in the thesis. Another crucial part of the thesis consists of an extended use of the reliance interest. In this part, especially with its relation to when the damages clause’s main obligation is invalid, Iargue that the compensation that has been granted in the case law, stems from an application of a non-contractual obligation.
Another central question for the thesis, which has been discussed since the middle of the nineteenth century, is the relationship between damages clauses and damages according to default rules. Damages according to the clause must always be paid, on the basis of the principle of the binding contract. The question is whether a damages clause affects the right to damages according to the default rules. The tendency in the second half of the twentieth century was to say that the damages clause is exclusive. In investigating this issue, this thesis had to take into account recent cases from the Swedish Supreme Court. My reading of these latter cases is that the background law does not contain any rule that governs the relationship between a damages clause and awarding damages according to the background law.
In the final two chapters, the thesis argues that the parties, in order to maximize their total utility, should use an exclusive damages clause and that the amount specified in the clause should be as close as possible to the expectation interest. This amount may then need to be adjusted to take account of any reliance expenditure and the parties’ attitude towards bearing the risk.
Department/s
- Lund University Centre for Business Law (Swedish abbr: ACLU)
- Department of Law
Publishing year
2019
Language
Swedish
Document type
Dissertation
Publisher
Lunds universitet, Media-Tryck
Topic
- Law
Keywords
- Law and economics
- Liquidated damages clause
- Penalty clause
- Economic efficiency
- Breach of contract
- Rättsekonomi
Status
Published
Research group
- Lund University Centre for Business Law (Swedish abbr: ACLU)
Supervisor
- Per Samuelsson
- Niklas Arvidsson
ISBN/ISSN/Other
- ISBN: 9789178952588
- ISBN: 9789178952571
Defence date
20 September 2019
Defence time
10:15
Defence place
Pufendorfsalen, Juridiska institutionen, Lilla Gråbrödersgatan 3C, Lund
Opponent
- Jori Munukka (Professor)