Issue 1

The Missing Interest: Restoration of the Contractual Equivalence

The analysis of contract remedies is dominated by Fuller and Perdue’s classification of the interests protected by remedies: expectation, reliance, and restitution. This Article argues that in many instances courts and legislatures award remedies that do not aim at any of these interests, but rather aim at another interest, namely, restoration of the contractual equivalence.

Restoration remedies strive to put the injured party in a position similar to the one she would have occupied had the parties made (and performed) a contract in which their obligations were adjusted to the actual performance by the breaching party, while maintaining the contractual equivalence in terms of the agreed value of performance, the chronological relation between their respective obligations, etc. Thus, for example, restoration remedies may put a buyer in a monetary position similar to the one she would have occupied had the contract referred to a smaller parcel of land, to goods of inferior quality, or to delivery at the (belated) time in which the goods were actually delivered.

The Article demonstrates that restoration of the contractual equivalence is a distinctive goal of contract remedies and explores its relations with the familiar interests. Surveying contract doctrines, it shows that various remedies for partial, defective or delayed performance are best understood as aiming at restoring the contractual equivalence. It argues that protection of the restoration interest is justified by various theories of contract law, including the will theory, corrective and distributive justice, economic efficiency, and contract as cooperative relationship. The Article proposes to make restoration remedies more systematically and generally available to the injured party.

Ambivalence About Formalism

In statutory interpretation, many scholars try to reconcile judicial power with democracy by cabining judicial discretion and rendering judges more faithful agents of Congress. Although debate pervades the field, the dominant approach is to rely on formalism to narrow judicial leeway and promote legislative supremacy. In constitutional theory, by contrast, many scholars respond to a very similar problem with a very different strategy. Here too, the concern is that judges will exercise power in a manner that substitutes judicial preferences for political will, and here too, there is as much disagreement as agreement. But instead of casting judicial discretion as the source of the problem, there is a growing trend in constitutional scholarship toward embracing judicial discretion as part of the solution. Many constitutional theorists urge judges to employ discretionary tools in a manner that limits their intrusions into the political process and minimizes the disruption associated with judicial review. These constitutional scholars tend to reject formalism in favor of a form of minimalism that is in many respects the antithesis of formalism.

Professor Molot suggests that both sets of scholars have gone too far in their positions on formalism. Statutory scholars often overlook the importance of judicial flexibility as an antidote to the excesses of formalism. Constitutional scholars often overlook the importance of formal constraints and fidelity to law. Using administrative law as a counterexample, Professor Molot sketches out a more balanced approach to formalism that he argues is superior to the one-sided approaches that have increasingly characterized statutory and constitutional scholarship today.

Through the Antitrust Looking Glass: A New Vision of Delaware’s Takeover Defense Jurisprudence

Beginning in 1985, Delaware’s jurisprudence governing the legality of takeover defenses, i.e., poison pills, has centered around a subtly complex concept—proportionality—as introduced in the seminal case of Unocal Corp. v. Mesa Petroleum Co. Unfortunately, Unocal proportionality review, initially billed as a comparison of the threat posed by a hostile bidder and the board’s defensive response, never evolved into a true balancing of these two elements. The failure of Unocal proportionality review to develop into anything more than a fact-specific inquiry with little precedential value could easily be viewed as one of Delaware corporate law’s greatest disappointments.

In the face of widespread criticism from academic commentators and their frequent calls for doctrinal overhaul in the name of predictability and bright-line rules, this Note argues, however, that the ad hoc quality of Unocal proportionality review, along with other inconsistencies in Delaware corporate law, is entirely appropriate in the context of takeover defense jurisprudence. It reaches this conclusion by likening Delaware’s takeover defense doctrine to federal antitrust’s Rule of Reason, which polices illegal restraints on trade under the Sherman Act.

Using this comparison, this Note presents a novel paradigm for understanding Delaware’s review of defensive measures, positing that the regime’s so-called flaws are actually key components of an effective, antitrust-like mechanism for evaluating directors’ implementation of takeover defenses. In doing so, it will demonstrate not only that Delaware courts’ treatment of Unocal as an ad hoc, effects-based test is a workable and appropriate methodology, but also that Delaware courts are uniquely equipped to employ such a method and can do so without the typical difficulties often attending a case-specific form of review. As a result, this Note offers a unique perspective on the undervalued strength of Delaware’s takeover defense jurisprudence, challenging critics’ repeated calls for reform and providing practitioners with valuable insight into the true underlying goals of the law with which they seek to comply.

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