36) Because the promisor may have occasion to gain more through breach than the promisee
will lose, the theory of efficient breach holds that the best outcome is for the promisor to breach the contract.
Indeed, where a promisor, with full knowledge of all the material circumstances, agrees to accept a lesser sum in payment of a debt, which in turn represents at least a substantial part of the sum originally owing, the promise should be binding unless the promisee
has engaged in economic duress or has otherwise misrepresented his true financial position.
action or forbearance on the part of the promisee
or a third person and
As already explained, however, the gains made by the promisor via breach simply cannot be understood as a basis for measuring the 'loss' the promisee
has suffered as a result of that breach.
This Article avoids doctrinal difficulties by labeling as a "donee beneficiary" if the purpose of the promisee
was to make a gift or to confer a right on a third person by contract without consideration.
See Craswell, supra note 46, at 636-38 (noting that specific performance, like over- compensatory remedies, has the potential to discourage efficient breaches); Schwartz, supra note 35, at 274 (arguing that if damages are fully compensatory, adding the option of specific performance creates an opportunity for the promisee
to exploit the promisor by threatening to compel performance when costs of performance are higher than the damages).
, or even to the promisor, whether a donative promise that
In particular, it is based on a surmise that when parties make promissory noises about doing X, they usually mean to commit themselves to do X (or, on an objective interpretation of meaning, can reasonably be understood by the promisee
to have done so) and, unless they expressly condition their promise, they intend (or can reasonably be understood by the promisee
to intend) that commitment to hold unless it becomes impossible or extremely burdensome to do so.
Shiffrin concludes: "If contract law ran parallel to morality, then contract law would--as the norms of promises do--require that promisors keep their promises as opposed merely to paying off their promisees
Ultimatum game experiments confirm that jilted promisees
are likely to be morally offended by contractual breach, and may prefer to punish
126) Few, if any, promisees
understand with confidence what such
In Sense and Sensibility, not only words (both implicit and explicit performatives (8)) but--and more important for Jane Austen--actions that occur in public may constitute a binding promise, both in the eyes of the promisee
and the community who observes such actions.