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Sequencing of Remedies in Sales Law

Author

Listed:
  • Tim Friehe

    (Eberhard Karls University Tübingen)

  • Tobias H. Tröger

    (Eberhard Karls University Tübingen)

Abstract

This paper analyzes the effects of different sequences of remedies on the incentives of sellers to invest in product quality and on the probability of contract termination. Despite ambitious efforts by the EU to harmonize national legislation, sales laws still differ significantly in Europe. The analysis uses a stylized model to compare the pertinent features of German law with their counterparts in English law. The pivotal difference between these jurisdictions lies in the sequencing of remedies. We find that it is possible that investment incentives and the probability that contractual relationships initiated will be completed may be larger under either legal regime. We also scrutinize more specific scenarios to derive clearer results despite the general case's ambiguity and to illustrate their context dependence.

Suggested Citation

  • Tim Friehe & Tobias H. Tröger, "undated". "Sequencing of Remedies in Sales Law," German Working Papers in Law and Economics 2008-1-1224, Berkeley Electronic Press.
    • Handle: RePEc:bep:dewple:2008-1-1224
    Note: oai:bepress:
    as

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    References listed on IDEAS

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    1. Esther Gal-Or, 1989. "Warranties as a Signal of Quality," Canadian Journal of Economics, Canadian Economics Association, vol. 22(1), pages 50-61, February.
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    3. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
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    6. Mann, Duncan P & Wissink, Jennifer P, 1990. "Money-Back Warranties vs. Replacement Warranties: A Simple Comparison," American Economic Review, American Economic Association, vol. 80(2), pages 432-436, May.
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    More about this item

    Keywords

    Sales Law; Statutory Remedies; Investment Incentives; Contract Termination;
    All these keywords.

    JEL classification:

    • K - Law and Economics

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