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We use a threshold-based design to study ex post discretion in lenders' contractual enforcement of covenant violations. At preset thresholds, lenders enforce contractual breaches only infrequently, but this enforcement is associated with material consequences (e.g., fees and renegotiations). Enforcement varies significantly over time and peaks when credit conditions are tightest, indicating that enforcement is procyclical. Costly coordination reduces enforcement: Syndicates with ex ante restrictive voting requirements enforce at lower rates. Consistent with theories of lender competition and implicit contracting, enforcement rates are lower for borrowers with access to alternative sources of financing and well-reputed lead arrangers. [ABSTRACT FROM AUTHOR]

In the 1970s, the Supreme Court prohibited the then-common practice of incarcerating criminal defendants because they lacked the money to immediately pay off their fines and fees. The Court suggested that states could instead put defendants on installment payment plans. As this Article shows, this suggestion came against a backdrop of impressive success stories about installment fines--including earlier experiments in which selected defendants had reliably paid off modest fines through carefully calibrated payment plans. Yet as this Article also shows, installment fines practices of today differ significantly from those early experiments, as lawmakers have increased fine amounts, added on fees, surcharges, and restitution, and penalized nonpayment through additional costs and other sanctions. This has turned installment fines into tools of long-term oppression. Further, the early experiments were only ever limited solutions that left behind people in the most precarious financial circumstances, widened the government's net around only those of limited means, and raised the risk that crime policy would be driven by revenue generation aims rather than justice. Those problems continue today. For all too many, installment fines are unaffordable, endless, and arbitrarily administered--and applied instead of better and more equitable solutions. We close the Article by arguing that the present-day uses of installment fines merit both constitutional challenge and policy reform. [ABSTRACT FROM AUTHOR]

Copyright of Annales de la Faculté de Droit d'Istanbul is the property of Annales de la Faculte de Droit d'Istanbul and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Research suggests that employees work harder under penalty contracts than under economically equivalent bonus contracts. We build on this literature by examining how the motivational advantage of penalty contracts depends on a common aspect of real-world contracts: payoff ambiguity. With payoff ambiguity, employees provide effort without knowing how much pay they will receive for a given level of performance. According to our theory, this ambiguity opens the door for employee optimism, which has contrasting effects under each contract frame. Results from an experiment support this theory, with an increase in ambiguity leading to less employee effort with penalty contracts (as employees optimistically expect small penalties) and more effort with bonus contracts (as employees optimistically expect large bonuses). We also find that these effects are stronger for more dispositionally optimistic employees. Overall, our results suggest that bonus contracts may be more motivating and penalty contracts less motivating than previously thought. [ABSTRACT FROM AUTHOR]

Contracts serve an important function: allocation of risks. In achieving this function, contractual parties routinely include a force majeure clause in their contracts to be excused from performance in the face of a supervening event. But how do force majeure clauses allocate risks? This Article breaks down this inquiry into three interrelated questions: (i) why do parties include force majeure clauses considering the robust common law excuse doctrines such as impossibility? (ii) How have courts historically approached force majeure clauses? And (iii) what serves as the most equitable and efficient framework for the risk-allocative function of force majeure clauses? This Article’s fresh look at force majeure clauses will inform courts’ approach to a slew of claims arising out of Covid-19 disruptions and future shocks. Using empirical methods (including machine learning and natural language processing) and doctrinal analysis, this Article makes the following contributions: First, based on empirical analysis of force majeure clauses and behavioral economics, it argues that parties primarily do away with common law’s basic assumption (ex ante) requirement in their force majeure clauses to focus instead on ex post analysis. Second, ’using computational methods on force majeure cases since 1810, it shows that the control factor (as opposed to foreseeability, parties’ intent, and contractual language) has been the leading factor in courts’ decisions. Third, the Article normatively suggests an overhaul shift towards a proportional ex post analysis of force majeure clauses which allocates risks pursuant to promisor’s measures to control the effects of the supervening event and promisee’s degree of reliance on contractual promises. [ABSTRACT FROM AUTHOR]

Health insurance contracts have long excluded coverage for care that is "experimental" or not "medically necessary." Historically, insurance policies defined these key terms of coverage using broad standards. For example, "medically necessary" care might be defined as care that is "generally accepted in the medical community." This contractual structure provided insurers with significant flexibility when making coverage determinations, even though denying coverage could pad their bottom line. For this reason, lawmakers developed various tools to prevent insurers from exploiting their discretion to determine when care was "medically necessary" or "experimental." These safeguards allowed insureds to challenge coverage denials internally within the insurance company, externally to an independent medical expert, and before courts via a contract law or ERISA cause of action. Additionally, state and federal mandates required insurers to cover specific medically necessary treatments and services. This Article documents a dramatic shift in health insurers' contracts and practices from a standard-based approach to determining the medical and scientific appropriateness of health care towards a rule-based approach for making these determinations. It shows how health insurers have increasingly made incredibly detailed and specific rules of medical necessity part of their formal contractual obligations to policyholders. The Article then argues that health insurers' shift from standards to rules for defining medically and scientifically appropriate health care undermines the effectiveness of traditional legal tools designed to constrain the risk of health insurer over-reaching. The Article concludes by exploring reforms that might effectively address the increasing rulification of medical necessity. [ABSTRACT FROM AUTHOR]

The paper presents the problem of building disturbances, which are usually an inseparable element during the implementation of construction projects. They were classified, their causes and sides of the construction process responsible for their creation were identified on the basis of the analyzed construction investment. In addition, using the Earned Value Management method, the scale of delays arising in construction works and the related effects were determined. The important role of close cooperation and good communication between all participants of the construction process was emphasized, which would reduce the phenomenon of building disturbances, but also mitigate the negative effects of delays that have already occurred.

Safety-critical systems manufacturers have the duty of care, i.e., they should take correct steps while performing acts that could foreseeably harm others. Commonly, industry standards prescribe reasonable steps in their process requirements, which regulatory bodies trust. Manufacturers perform careful documentation of compliance with each requirement to show that they act under acceptable criteria. To facilitate this task, a safety-centered planning-time framework, called ACCEPT, has been proposed. Based on compliance-by-design, ACCEPT capabilities (i.e., processes and standards modeling, and automatic compliance checking) permit to design Compliance-aware Engineering Process Plans (CaEPP), which are able to show the planning-time allocation of standard demands, i.e., if the elements set down by the standard requirements are present at given points in the engineering process plan. In this paper, we perform a case study to understand if the ACCEPT produced models could support the planning of space software engineering processes. Space software is safety and mission-critical, and it is often the result of industrial cooperation. Such cooperation is coordinated through compliance with relevant standards. In the European context, ECSS-E-ST-40C is the de-facto standard for space software production. The planning of processes in compliance with project-specific ECSS-E-ST-40C applicable requirements is mandatory during contractual agreements. Our analysis is based on qualitative criteria targeting the effort dictated by task demands required to create a CaEPP for software development with ACCEPT. Initial observations show that the effort required to model compliance and processes artifacts is significant. However, such an effort pays off in the long term since models are, to some extend, reusable and flexible. The coverage level of the models is also analyzed based on design decisions. In our opinion, such a level is adequate since it responds to the information needs required by the ECSS-E-ST-40C framework. [ABSTRACT FROM AUTHOR]

This article examines the extent to which entire agreement clauses (EACs) and non-reliance clauses (NRCs) are enforceable to preclude actions for negligent pre-contractual misrepresentations. It is argued that courts could improve legal certainty and contractual fairness by adopting two distinct legal rules to be applied, respectively, to contracts between sophisticated parties and in adhesion contracts. First, it is suggested that in contracts between sophisticated parties only specific contractual barriers to actions should provide a complete defence against negligent misrepresentation claims. Under this rule, the exclusionary effect of EACs and NRCs would be achieved only if an express term of the contract is inconsistent with the pre-contractual statement on which the plaintiff bases their tort claim. Second, it is proposed that in contracts of adhesion EACs and NRCs should be regarded as presumptively unconscionable, thereby precluding sophisticated parties from using such clauses as a shield against tort claims for negligence misrepresentations. [ABSTRACT FROM AUTHOR]

This article deals with the presentation of the contractual penalty concept which is regulated in the Czech as well as Polish Civil Code. Then the two are compared, namely their individual aspects, in regard to the aforementioned measure within both legal systems. The first part primarily focuses on the interpretation of the content of measures of contractual penalty and the identification of elementary differences. What follows is the analysis of the functions of contractual penalties, again with emphasis on the comparison of the function of the Czech and Polish contractual penalties. The next part deals with the relationship of the contractual penalty with damages. This stage then deals with to what extent the contractual latitude may be applied in the Polish legal system when setting up the contractual conditions for the application of contractual penalty as well as the compensation of damages resulting from violation of obligation. In conclusion there are presented measures similar to contractual penalty such as penalties and interest on late payments, especially from the Polish legal code's point of view. [ABSTRACT FROM AUTHOR]

The article examines the enforcement of liquidated damages clauses by the courts of New York and California. Other topics include the policy debates on the distinction between penalty clauses and liquidated damages clauses, settlement agreements, default interest rates, and the trends in the enforcement of commercial and residential leases.

In Barton v Gwyn‐Jones the Court of Appeal considered the remedies available to a service provider who performed services pursuant to a contract that expressly stated that they were entitled to payment of a specified sum if the services led to a particular result, but did not expressly state whether the service provider was entitled to payment if the services failed to lead to that result. This note argues that the best explanation of the remedy awarded by the Court of Appeal is restitution for a 'failure of condition'. It is further argued, although more tentatively, that the restitutionary award was probably not inconsistent with the parties' contractual allocation of risk. [ABSTRACT FROM AUTHOR]

The article reports that two foundational laws have framed the debate around waivers of contractual rights since their codification in 1872. Topics include examines that California inaugurated a public policy of restraining parties' ability to leverage bargaining power to exempt themselves from public legal obligations via private contracts.

The article focuses on doctrinal history of fault at civil law through the lens of Louisiana's Roman and French legal ancestry. It mentions modern doctrine of fault that comports with Louisiana's civilian tradition and modern law and epistemological inquiry into the history and evolution of how civil has understood fault over time. It also mentions damages for contractual liability are limited to the harm foreseeable at the time the contract.

This article addresses monetary remedies in employment team move and misuse of confidential information cases. It argues that, after the Supreme Court's decision in One Step (Support) Ltd v Morris-Garner, negotiating (previously Wrotham Park) damages offer a useful additional compensatory tool in misuse of confidential information cases. They can help overcome some of the difficulties with ordinary contractual damages, equitable remedies for breach of fiduciary duty and confidence and limitations in injunctive relief. While One Step is restrictive overall, there is a real role for negotiating damages in employment cases where misuse of confidential information is the sole or predominant breach of contract. The well-established Faccenda approach is suggested for identifying the requisite confidential information. [ABSTRACT FROM AUTHOR]

This article aims synthetically to refer to discussion between Polish academiclawyers about the controversies regarding to reduction of a specified sum in "agreed or stipulated payment for non-performance" in art. 484 § 2 of Polish Civil Code. These conclusions, resulting from the analysis of Polish private law - will be referring to the same reduction-clause in three selected acts of contracts model law: UNIDROIT Principles of International Commercial Contracts, the Principles of European Contract Law and the Draft Common Frame of Reference. The last part of this article contains the conclusions de lege ferenda from comparative analysis. [ABSTRACT FROM AUTHOR]

Conventional economics assumes workers provide the same effort under penalty contracts and economically equivalent bonus contracts. However, prior research finds that although workers prefer bonus contracts, they provide more effort under penalty contracts. Given these findings, the prevalence of bonus contracts in practice is puzzling. If penalty contracts yield more worker effort, why would employers not use them more often? We conduct experimental labor markets to test whether the prior finding of more effort under penalty contracts than bonus contracts (i.e., the contract frame effect) persists when workers can choose their contract and know that their employer intentionally offered the contract they choose. As predicted, these features of labor markets eliminate the difference in effort between penalty and bonus contracts reported in prior studies. This finding suggests employers may use bonus contracts more often than penalty contracts because they can offer the contract most workers prefer without sacrificing worker effort. [ABSTRACT FROM AUTHOR]

When discussing the fairness of boilerplate consumer contracts, courts often rely on the criterion of symmetry: whether a given contractual provision applies equally to both parties. In many states, boilerplate provisions that apply solely to the consumer but not to the merchant are much more likely to be judged unconscionable than provisions creating identical obligations for both parties. However, this approach is misguided. Relying on game theory, this Article demonstrates that the symmetry criterion is unlikely to promote fair or efficient contracts. [ABSTRACT FROM AUTHOR]

Copyright of Zeszyty Prawnicze Biuro Analiz Sejmowej is the property of Kancelaria Sejmu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article examines the general law applicable to liquidated damage clauses, and its application to the clauses in the employment contracts of Sinclair Broadcast Group. Topics discussed include definition of liquidated damage clauses, Sinclair's attempt to enforce its liquidated damages clauses, and the likelihood that Sinclair's clauses will be held unenforceable penalties, rather than proper liquidated damages clauses.

Reinsurance treaties and binder agreements regulate penalty calculations in the event the insurer and underwriting manager is unprofitable and/or profitable. The formulae and different premium terminologies are investigated to calculate loss ratios and whether there is an overlap in sliding scale penalty calculations/formulae relevant to loss ratios of treaties and binder agreements. Treaties and binder agreements generally use sliding scale penalties to calculate reinsurance commission or sharing in the insurer's profits by an underwriting manager and is in conflict with the Conventional Penalties Act 15 of 1962 of South Africa. The Conventional Penalties Act 15 of 1962 must guide reinsurers and insurers in their profit calculations formulae to prevent any form of sliding scale penalties relevant to loss ratios. It is therefore suggested that a standard template of profit calculations and terminologies should be used in binder agreements to prevent different calculations of loss ratios in the short term insurance landscape. This will guide the Financial Conduct Authority Services (previously the Financial Services Board) to understand loss ratios of affordable short term financial products when compared to loss ratios of other short term financial products in South Africa. [ABSTRACT FROM AUTHOR]

In this article, we consider a model of multiple make-to-order suppliers, which compete based on their promised sojourn times. A fixed penalty is imposed on the suppliers for failing the promised delivery time requirement at an agreed service level. The demand is allocated to the suppliers according to the promised sojourn times, using either supplier-selection (SS) approach or supplier-allocation (SA) approach as proposed in Benjaafar et al. (2007, Outsourcing via service competition, Management Science, 53 (2), 241-259). Their framework and results are then applied to obtain the competition outcome. It was found that the buyer can orchestrate the competition to induce the suppliers to offer lower promised sojourn times and select higher service capacities through restricting the suppliers to choose promised sojourn times above a certain level. The SS approach is also found to induce a better service quality than the SA approach. The role of the penalty level is then addressed. It was found that a higher penalty level induces a higher service capacity and is always beneficial to the buyer. [ABSTRACT FROM AUTHOR]

A fundamental management accounting issue is how to incorporate decision-influencing information (e.g., an ex post state signal) into employment contracts. Our experiment examines the effects of contract framing on such information use in a principal-agent setting. In each of 40 rounds, participants (as employer and worker) negotiate a contract that specifies pay depending on an ex post state signal. State-signal pay is framed as either a bonus or a penalty over two groups. The results show that the bonus frame facilitates information use, because of worker loss aversion. Although both groups initially underweigh the state signal, the bonus group quickly converges toward the optimal weight, whereas the penalty group persistently underweighs the state signal. [ABSTRACT FROM AUTHOR]

The article informs about Germany Kammergericht decision on forfeiture of contractual penalties in the case of random checks of the Amazon Marketplace offers. Topics include provider uses an Internet sales platform where there is the technical possibility that the information for the product, such as the product description, will be changed by dealers; and liability for disturbances is made dependent on the violation of examination obligations of contractual penalties.

The article reports on modern thoughts of political relevance of humanity. Topics include provide information on European sense of humanity into actual reform movement rather than moral value, symbol of civility, religious quality, or philosophical debate; and determines that predisposing factors include the perception of increased commercial and contractual life.

Since 2000, the Charles Koch Foundation (CKF) has paid hundreds of millions of dollars to US universities in contractual exchanges. Many of these contracts have dictated the establishment or support of a CKF-affiliated center or institute on campus and university employment of CKF-affiliated tenured or tenure-track professors who agree to promote the CKF philosophy of minimal government regulation of business. While many in the academic community are opposed to these contracts because of concerns about academic freedom and the transfer of university decision-making from the campus to the external wealthy, the CKF has successfully forged many such contracts with universities. While most of these contracts are undisclosed, 14 of these contracts were obtained and analyzed to determine what the CKF has been purchasing from these universities. [ABSTRACT FROM AUTHOR]

Copyright of Annals of Juridica Sciences / Roczniki Nauk Prawnych is the property of Towarzystwo Naukowe KUL & Katolicki Uniwersytet Lubelski Jana Pawla II and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines the effects of incentive contract framing on misreporting and entitlement. I conduct a 2 × 2 between-subjects experiment, manipulating incentive contract framing (Bonus/Penalty) and the awareness of the opportunity to misreport (Before Effort/After Effort). I predict and find that (1) penalty contracts cause a higher rate and degree of misreporting, and (2) this greater misreporting occurs due to a greater sense of entitlement to the incentive funds. Collectively, this study's theory and results indicate that while penalty contracts can sometimes increase effort relative to bonus contracts, they also encourage greater dishonesty in reporting when that effort is not successful. Data Availability: Contact the author. [ABSTRACT FROM AUTHOR]

One Step is an important decision that deals with the circumstances in which a claimant may recover damages in contract on the so‐called Wrotham Park basis, valued as the amount that would hypothetically have been negotiated between willing parties to release the defendant from his obligation. This note argues that, although the Supreme Court was right not to award damages on this basis in this case, the test laid down by their Lordships for when such damages are available is unclear and will be difficult to apply. [ABSTRACT FROM AUTHOR]

Das OLG München hat kürzlich in einer Entscheidung die Verkäuferin einer zahnärztlichen Praxis zur Zahlung einer Vertragsstrafe wegen eines Verstoßes gegen ein nachvertragliches Wettbewerbsverbot verurteilt. Das im Praxisübernahmevertrag vorgesehene Wettbewerbsverbot knüpfte allerdings seinem Wortlaut nach lediglich an eine Niederlassung innerhalb einer räumlich und gegenständlich näher beschriebenen Verbotszone an. Das OLG München gelangt im Wege einer ergänzenden Vertragsauslegung zum Ergebnis, dass auch Einwirkungshandlungen von außerhalb der Verbotszone unter das vertragsstrafebewehrte Wettbewerbsverbot fallen. Die Entscheidung des OLG München gibt Veranlassung zu Kritik und dazu, die gängige kautelarjuristische Praxis einer Überprüfung zu unterziehen. [ABSTRACT FROM AUTHOR]

Industrial cluster theory has important guiding significance for regional industrial development and industrial agglomeration advantages. Cooperation among enterprises is the corner stone of industrial clusters. The purpose of the paper is to explore the effects of cluster informal contracts on cluster enterprises and the behavior of external partners. Based on the dynamic evolutionary game theory, this paper constructs a model, which incorporates several main factors influencing the innovative cooperation among local and external cluster enterprises. By calculating the replicator dynamics equations and analyzing the evolutionary stable strategies, this paper discusses the evolution process of cooperation strategies of enterprises in different situation. Furthermore, by using MATLAB software to simulate the model, this paper verifies the accuracy and reliability of the game model. Results show that, in addition to the formal market contract, effective implementations of cluster informal contracts can reduce opportunistic behavior in innovative cooperation among internal and external enterprises. Meanwhile, we should pay attention to strengthen the external innovative cooperation, increase severity of penalties, enhance the credit network externality, and avoid the relevant risks. The paper enriches our understanding about how informal contracts can help promote and cultivate good cooperative order in innovative cooperation of clusters. [ABSTRACT FROM AUTHOR]

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Tit-for-tat is a strategy of immediate and proportional responses. Game theorists showed that this strategy often leads to fruitful cooperation. Indeed, many legal regimes resemble a tit-fortat strategy and benefit from its ability to avoid unnecessary conflicts. But in situations of uncertainty--when actors cannot be sure about the actions of their adversaries--a tit-for-tat strategy would destroy cooperation and lead to continuous clashes. Because tit-for-tat responds immediately, a single mistake about the intentions of the adversary can lead to retaliation and start an endless string of counterstrikes. When uncertainty prevails, a strategy of many-tits-for-many-tats is optimal. Actors applying this strategy study the actions of their adversaries over multiple rounds without issuing an immediate response. Only when the actor is convinced that the adversary intentionally defects, will the actor issue a disproportionately forceful response. The laws of war, criminal law, and international sales law all face some situations of uncertainty. This Article argues that each of these legal fields adopts a strategy of many-tits-for-many-tats to address conditions of acute uncertainty. [ABSTRACT FROM AUTHOR]

The contractual provision on the warranty against eviction is a matter in which the parties involved in the making of a selling contract often have tight negotiations. Many times the seller is looking for the exemption of provision of warranty, but is such a clause legally available? In the following we will present you the procedure in which the parties can limit or extend the provision aginst eviction. [ABSTRACT FROM AUTHOR]

The article discusses the impact of the Antitrust Damages Directive in the Spanish jurisdiction and its legal order. Topics discussed include design and the development of the Directive implementation process in Spain; information on the Spanish Competition Act; and the competition laws in Spain along with the penalty procedure in relation to an infringement of competition law.

Framework contracts are a frequently used tool in the legal dealings. However, they have been studied scantily in the Colombian legal doctrine despite the difficulties they posit in both the theory and the practice. This paper aims to examine the notion of framework contract in order to differentiate it from other related legal concepts, study its legal nature, and ascertain its legal effects. [ABSTRACT FROM AUTHOR]

The article focuses on the main similarities and differences regarding the concept of the penalty clause and the manner in which it is exercised in the Polish and Spanish legal systems. The aim is to conduct an analysis of selected issues relating to penalty clauses (contractual penalties), in particular their characteristics, the relationship between the claim for payment of contractual penalty and the occurrence of damage, as well as establishing a contractual penalty for withdrawal from a contract. The views of representatives of the judiciary and the role of the judge in shaping the concept of the penalty clause in both jurisdictions, in particular as regards moderation of contractual penalties, will also be analyzed. [ABSTRACT FROM AUTHOR]

Copyright of Revista del Instituto Colombiano de Derecho Procesal is the property of Instituto Colombiano de Derecho Procesal and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

As a consequence of the rule against penalties, contractual clauses with a penal character are unenforceable. The rule has recently undergone significant revision in both the United Kingdom and Australia, following decisions by the highest courts in those jurisdictions. This article sets out and considers the options that those decisions put forward for the development of the rule against penalties in New Zealand. The variants are presented in terms of answers to two questions. The first is the "engagement question": which kinds of contractual clauses are capable of being subject to the rule against penalties? At first glance, the English and Australian authorities present different answers to this question. However, we argue that their answer is essentially the same - the clause must be a secondary obligation triggered by failure to perform a contractual promise. We suggest the English framing of the engagement question should be followed in New Zealand, primarily because it is clearer. The second question is the "test question": given that a clause engages the rule, what is the test for whether the clause is penal? The new cases are in agreement that a clause is a penalty if it is out of proportion to a legitimate interest in the performance of the contract, but two competing approaches emerge as to what can qualify as such an interest. We call the narrower approach the "bargain approach"; it focuses on interests that are protected by the parties' bargain, and we argue it is preferable for this reason. However, on the broader approach, which we call the "party purposive approach", the courts can look further to the innocent party's motives for entering into the contract. This approach has overwhelming judicial support, and is more likely to be adopted in New Zealand. [ABSTRACT FROM AUTHOR]