The question of damage measures presented by the conscious decision of a promisor to breach a losing contract raises one of the most perplexing conceptual problems in contract law. Recognizing the present inability of the courts rationally to resolve the problem, as illustrated by the opposing decisions in Groves v. John Wunder Company and Peevyhouse v. Garland Coal and Mining Company, the author undertakes to examine the premises of contract law with a fresh perspective-economic analysis.

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