Enforcing bilateral promises: a comparative law and economics perspective

Parties often exchange promises of future performance with one another.
Legal systems frame and regulate contracts involving the exchange of bilateral
promises of future performance differently from one another. Two conceptual and
practical questions often arise in these bilateral situations. Should a breaching
promisor be allowed to force the performance of his non-breaching promisee? Should
a breaching party be able to collect damages in a contract if his counterpart was also in
breach? This article examines these interrelated questions from a comparative law and
economics perspective. We consider contracts in which parties make reciprocal
promises of performance and study the incentives created by applying a defence of
non-performance in unilateral breach cases and the ‘plaintiff in default’ preclusion
rules in bilateral breach cases.