A new perspective on comparative contract law: revisiting the differences between civil and common law systems

Abstract

This article seeks to offer a novel interpretation of certain classical differences between the civil and the common law of contracts. This analysis reveals a clear, but so far neglected, pattern. The civil law imposes greater limitations on the scope of contractual obligations, by recognizing a stronger duty of good faith and imposing more mandatory terms. The common law system, by contrast, more forcefully constrains the remedies available for breach of contract, by invalidating penalty clauses, qualifying specific performance as an exceptional remedy, and more generously granting a “fresh start” in bankruptcy. Nevertheless, the different roles of the State in policing the terms of the contract and imposing remedies for non-performance are, to some extent, functional substitutes. This means that practical outcomes in both systems are closer than one would anticipate by focusing on individual rules and institutions in isolation.