Are Breaches really that Bad? A Rationale not to allow Breaches

Abstract

So far, we discussed why Member States might breach agreements they entered into and a performed a first simple analysis of state liability law in the framework of the classical law and economics literature. However, we remain with the question whether there now is a need for action upon such breaches. In other words: once an agreement (in this case, the agreement is a legal provision) exist, the elementary question will arise what one should do in case of a conflict. Should one stubbornly stick to the agreement or should one allow for breaches? This short chapter is a brief economic analysis of the preferability of breaches of European law. Due to the special nature of the agreement, we thus discuss a situation with characteristics of both contract law and law enforcement.