While proponents of ’law and economics’ can reasonably agree on theories such as efficient breach and efficient common law, the application of these theories to the penalty doctrine has divided the faithful into two groups: those who would keep the penalty doctrine - the retentionists - and those who would do away with the doctrine - the abolitionists. While these categorisations are not internally consistent, nor the boundaries between them entirely clear, such a classification is a useful aid to understand the economic consideration of the penalty doctrine.
A surprising omission in the reshaping of the penalty doctrine is the courts failure to explicitly consider the academic economic analysis of the penalty doctrine. This article sets out the key arguments that the courts can (and should) consider in an economic analysis of the penalty doctrine.
"Economists Divided - Different Perceptions of Contracts Penalty Doctrine,"
Bond Law Review:
2, Article 5.
Available at: http://epublications.bond.edu.au/blr/vol6/iss2/5