[blindlaw] Inducement to Breach of Contract

Derek Manners dmanners at jd16.law.harvard.edu
Thu Oct 23 21:11:46 UTC 2014


I'd look at the efficient breach doctrine. Basically, if A can get more money from selling to C than it can B, A is allowed to breach but it has to pay the damages it causes to B. This would really also only apply in things like the Mona Lisa or specific "one of a kind" situations. I believe there's a car case in contracts that deals with this specifically. But either way, only A would ever be liable because they are the ones damaging B/breaching the contract. 

Best
Derek Manners

Sent from my iPhone

> On Oct 23, 2014, at 3:11 PM, Gerard Sadlier via blindlaw <blindlaw at nfbnet.org> wrote:
> 
> Hi all
> 
> I'm looking for any authorities, academic or judicial on the following points:
> 
> 1. Suppose that   A has a contract with B. Subsequently, A   enters
> into a contract with C which is inconsistent with A's contract with B.
> If A fulfils its contract with C, it will by so doing breach its
> contract with B. Suppose that C was unaware of A's contract with B
> when C contracted with A. Can C be held liable for inducing A to
> breach their contract with B? The authorities I have found are
> inconclusive on the point but suggest that C cannot be held liable.
> 
> 2. Suppose that A's contract with C in the example above is an option
> agreement. For example, an option agreement under which A has the
> right (but no obligation) to sell to C. Suppose that under the
> agreement, C is bound to buy if A chooses to sell to it. A's contract
> with B obliges A to sell to B. Does A breach its contract with B by
> entering into the option agreement with C or at the point when A
> exercises its option and sells to C? The authorities I have found
> suggests that A breaches its contract with B only when it exercises
> its option to sell to C.
> 
> 3. If the answer to 2 above is that A breaches its contract with B
> only when it sells to C, then:  If C did not know of A's contract with
> B when C contracted with A but became aware of A's contract with B
> before A chose to exercise its option to sell to C - In what
> circumstances would C be held liable for inducing a breach of A's
> contract with B? In particular, would C be entitled to press A to
> exercise their option after C was aware that by doing so, A would
> breach its contract with B?
> 
> Apologies for the detailed hypotheticals - I really would be grateful
> for any pointers, as point 3 in particular seem unconsidered in
> the authorities that I have found at least.
> 
> Kind regards
> 
> Ger
> 
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