The availability of gain-based damages for breach of contract

This thesis examines, from an economic perspective, the problem of determining when and whether gain-based damages are an appropriate response to a breach of contract. Starting from the premise that such a remedy is needed to protect the integrity of contract’s institutional function, consideration is then given to the nature of that function and how gain-based damages may support it. The conclusion reached is that contract’s legal function is essentially economic and that gain-based damages may be of aid to courts in remedying inefficient outcomes arising from breach of contract, preventing economically inefficient breaches. The nature of a gain-based remedy is then explored, and enquiry is made into the potential means for developing such a remedy. After considering the potential to adapt a number of existing remedies, the thesis concludes that only an entirely novel development will fulfil the function of the remedy required, as adapting existing remedies will only create difficulties in other areas of law