Efficient Contract Remedies And the European Unification
This paper applies theoretical results that are derived from financial-economic principles to the issue of efficient contract remedies in view of the European Unification. Common Law favors the ‘expectation damages’ remedy, according to which a party who is aggrieved by a breach of contract expects an ex-post damages award, while this paper demonstrates that if the subject of the contract is traded continuously with observable values, an alternative remedy is equally efficient and just. The alternative remedy is rationalized on an ex-ante basis, and thus, courts intervention in the event of a breach of contract may not be essential. The EU aims to establish a “uniform commercial code superior to all national law.” This goal reflects current cultural differences and lacks of homogeneity, such as expectations and risk preferences across EU Member States. Lacks of homogeneity, can not, however, invalidate the above conclusion, as long as prices are continuously traded and a ‘single price’ regime prevails. Accordingly, this paper predicts that since price differentials across Member States are likely to disappear faster than other non-homogeneous factors, the Court of Justice will show a tendency to rule, utilizing the rationale underlying the ‘ex-ante regime,’ and perhaps, to overturn country-specific rulings by National Courts, which favor the ‘expectation damages regime.’
Contract Remedies and Options Pricing
This article examines the choice between money damages and specific performance as the remedy for contract breach by drawing on the theory of options valuation. The ability to breach and pay money damages is analogous to granting the breaching party an option to buy back his performance for a strike price equal to the damages award. The option affects the parties' returns from the contract and the variance of those returns. The parties' ex ante preference for money damages or specific performance should therefore depend, among other things, on their ability to value the option and their attitudes toward risk. The article examines the parties' ability to determine the option value and the effects of that value on their preferences under various assumptions. It concludes that the options analogy helps to explain the common law's choice of money damages as the normal remedy and the most common exceptions.
Inferring Learning Strategies from Students ’ Errors
Student models in an Intelligent Tutoring System (ITS) aim at representing both correct and incorrect knowledge of the student in a particular domain of learning. This data serves as the basis upon which the Tutor can dispense remedial feedback. This paper presents a framework in which learners’ errors are diagnosed, classified and linked to cognitive processes associated with learning. The cognitive processes we identify are those of generalization, misattribution and ignorance. Our system applies to the domain of Second Language Acquisition and our approach uses Chomsky’s linguistic theory of Principles and Parameters. We particularly concentrate on the acquisition of the Phrase Structure component.