a1 Law, Chicago-Kent College of Law, Illinois Institute of Technology
Two kinds of remedies have traditionally been employed for breach of contract: legal relief and equitable relief. Legal relief normally takes the form of money damages. Equitable relief normally consists either of specific performance or an injunction – that is, the party in breach may be ordered to perform an act or to refrain from performing an act. In this article I will use a “consent theory of contract” to assess the choice between money damages and specific performance. According to such a theory, contractual obligation is dependent on more fundamental entitlements of the parties and arises as a result of the parties' consent to transfer alienable rights.
My thesis will be that the normal rule favoring money damages should be replaced with one that presumptively favors specific performance unless the parties have consented to money damages instead. The principal obstacle to such an approach is the reluctance of courts to specifically enforce contracts for personal services. The philosophical distinction between alienable and inalienable rights bolsters this historical reticence, since a right to personal services may be seen as inalienable.
I will then explain why, if the subject matter of a contract for personal services is properly confined to an alienable right to money damages for failure to perform, specific enforcement of such contracts is no longer problematic. Finally, I shall consider whether the subject matter of contracts for corporate services is properly confined to money damages like contracts for personal services, or whether performance of corporate services can be made the subject of a valid rights transfer and judicially compelled in the same manner as contracts for external resources.
* I wish to thank the following people for their most helpful comments on an earlier draft: Larry Alexander, Stuart Deutsch, Richard Epstein, David Gerber, R. H. Helmholz, Marty Malin, Emilio Pacheco, Ellen Frankel Paul, and Christopher Wonnell. Financial support for this research was provided by the Marshall D. Ewell Research Fund of I.I.T. Chicago-Kent College of Law.