The Research On The Transplanting Of The Theory Of Efficient Breach

The theory of efficient breach, originating from common law, is an important contract theory. As a theory that proposes the law should allow people to break contract if the breach is more efficient than specific performance, it bases on the theory of the separation between law and morality, the theory that considers contract as an option to perform or pay and introduces Hypothesis of economic man, Coase theorem, Pareto optimality and Kaldor-Hicks efficiency as research tools. In the academic circle, the arguments about the theory of efficient breach have never stopped since the theory was born. The scholars who support it think the theory can cut down the transaction cost and increase the efficiency of the social resource utilization. However, the scholars who oppose it consider the theory neither moral nor efficient. In our country, the theory of efficient breach also attracts scholars’ attention along with its worldwide spread and the arguments above is also spread to our country. Some scholars advocate that the theory of efficient breach should be introduced into our country. On the contrary, other scholars oppose to introduce the theory into our country because of its defect. Looking at the scholars’ studies of the theory of efficient breach in our country, most of them focus on the theory’s fundamental connotations, applicable conditions, rationality and limitation. These studies, of course, are important, but they lack Chinese consciousness and don’t pay enough attention to practical problems in China. As a theory originated from common law contract theory, the theory of efficient breach is different from China’s legal system in the legal idea, the legal principle and the legal rule. Therefore, it is the Chinese consciousness that is important for the studies of the theory of efficient breach in Chinese context. What we call the Chinese consciousness is that the studies of the theory of efficient breach should base on China’s legal system to find the differences between the theory and China’s legal system and concern China’s reality to solve the practical problems. The content of this article is arranged as follow: firstly, this article undertakes a comprehensive study on the theory of efficient breach, including the theory’s origin, theoretical basis, value orientation and its central element: damage compensation. Secondly, this article compare and analyse the theory of efficient breach and our legal system, then find there are three conflicts between them and they are efficiency vs justice in the aspect of legal idea, the freedom of breach vs the principle of good faith in the aspect of legal principle, and damage compensation vs specific performance in the aspect of legal rule. Considering these conflicts, this article opposes to introduce the theory of efficient into our country. Thirdly, this article refutes the advocates of scholars, who agree to introduce the theory of efficient breach, one by one. Finally, this article suggests that disgorgement.damages for breach of contract should be established in our legal system to deter the efficient breach.