The remedies available for breach of contract vary among legal systems. In most European countries, breaching parties may be required to pay punitive damages in addition to compensating those left in the lurch for actual losses. In the United States, by contrast, those wronged are generally limited to compensatory damages. Underlying this discord is a fundamental difference in assumptions about how economic actors will respond to the availability of punitive damages for contractual breaches. Comparative analysis provides a means of testing these assumptions when such tests are impossible using information from the United States alone. In this paper, we take advantage of the transition from state socialism to market capitalism in Russia to examine the impact of the introduction of penalties as a possible remedy for non-payment of contractual obligations. Drawing on evidence from a 1997 enterprise survey as well as research into doctrinal development, we investigate how Russian courts and industrial enterprises have responded to this new option, and inquire whether the outcomes that would be predicted by Western theorizing on contract law have come to pass.
Public Note
Additional bibliographic information:
Hendley, K., Peter Murrell, Randi Ryterman. (2001). Punitive Damages for Contractual Breaches in Comparative Perspective: The Use of Penalties by Russian Enterprises. Wisconsin Law Review, 2001(3), 639-679.
