Discussion Question:

Is it ethical to breach a contract?Or, put another way, if you are the type of businessperson who regularly breaches contracts - can you really be considered an ethical businessperson?How should the courts treat a breach of contract?

Contracts are promises between people or businesses that the law will enforce.When a contract is breached, the courts do notnormallyforce the defendant to complete the contract.Instead, damages, if they can be proven, are usually awarded and the court calculates the amount of the damage award based on a simple question, "how much money do we have to award the plaintiff to put them in the same financial position they would have been in had the contract been fulfilled".For example, if the plaintiff would have made a profit, then the profit must be paid by the defendant (assuming they have the funds to do so!).

Historically, punitive damages for breaking the promise and damages for hurt feelings etc. are not normally part of the award.

Going back to the original question - if you are the type of businessperson who regularly breaches contracts - can you be considered an ethical businessperson? Does do the nature of the contract and the circumstances matter?Is it less problematic from a moral standpoint to breach some contracts than it is for others?Is the type of relationship between the parties important?Can you think of examples to illustrate your point?What should the courts do about this distinction and if you were a judge, what would do?Should the fact that someone broke a promise be a stand-alone basis for awarding damages in some situations (ie. in addition to the proven losses)?Does it matter if it was intentional - for example, a better deal came along so it made economic sense to break the contract?

Returning to theoriginalquestion - ifyou are the type of businessperson who regularly breaches contracts - can you really be considered an ethical businessperson?Is it unethical tobreak a contract?How should the courts treat a breach of contract?