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Augmented Sanctions: Material Breach, Total Breach, and Opportunistic Breach; Cure; Suspension and Termination

Melvin A. Eisenberg

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Abstract

Every breach of contract gives the promisee the right to recover expectation damages. Under certain circumstances a promisee may also have the right to invoke augmented sanctions, including damages measured on the basis that the promisor totally failed to perform the contract (as opposed to damages measured only by the harm from breach of a particular term), and suspension and termination of the contract. If a promisor commits a breach that was neither material nor opportunistic and the breach is curable—that is, if the effect of the breach is reversible—she should be able to avoid the imposition of an augmented sanction by curing the breach promptly after the promisee gives her notice that she is in breach and that unless she promptly cures the breach he will terminate the contract.

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What this paper is about

Every breach of contract gives the promisee the right to recover expectation damages. Under certain circumstances a promisee may also have the right to invoke augmented sanctions, including damages measured on the basis that the promisor totally failed to perform the contract (as opposed to damages measured only by the harm from breach of a particular term), and suspension and termination of the contract. If a promisor commits a breach that was neither material nor opportunistic and the breach is curable—that is, if the effect of the breach is reversible—she should be able to avoid the imposition of an augmented sanction by curing the breach promptly after the promisee gives her notice that she is in breach and that unless she promptly cures the breach he will terminate the contract.

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Available abstract

Every breach of contract gives the promisee the right to recover expectation damages. Under certain circumstances a promisee may also have the right to invoke augmented sanctions, including damages measured on the basis that the promisor totally failed to perform the contract (as opposed to damages measured only by the harm from breach of a particular term), and suspension and termination of the contract. If a promisor commits a breach that was neither material nor opportunistic and the breach is curable—that is, if the effect of the breach is reversible—she should be able to avoid the imposition of an augmented sanction by curing the breach promptly after the promisee gives her notice that she is in breach and that unless she promptly cures the breach he will terminate the contract.

Key concepts: Breach of contract, Damages, Sanctions, Notice, Harm, Business, Law, Law and economics

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