【正文】 2 The breach of contract in French law: between safety of expectations and efficiency Pierre Garello? Faculte d’Economie Appliqu233。e, Universite de Droit, d’Econimie et des Sciences d’ AixMarseille, 3 Avenue Robert Schuman, AixenProvence 13628, France Accepted 20 August 2020 1. Introduction: which path will lead us to a better understanding of French contract law? Contracts are marvellous tools to help us to live in a world of uncertainty. They allow us to project ourselves into an unknowable future, to invest. Lawyers who have inspired the French Civil law and contributed to its evolution, as well as most lawyers in the world, have clearly perceived the necessity to protect that institution. ―The contract is, as far as the individual is concerned, the best forecasting instrument generating legal security, and the favored path to freedom and responsibility that is necessary for the flourishing of human beings in a society.‖1 Contracts are far from miraculous tools, however. If they make life easier, they do not necessarily make life easy. As the future unfolds, one or both contracting parties may be tempted, or pelled, to break his or her promise. But, the mere fact that the contract is running into difficulties does not force the law to do something!2 It is only when one of the parties does not perform that the law (the court, the legislation), backed with coercive power, has to give an opinion, to decide the case. In order to do so some principles, or theories, are required to reach a judgment as to what is the best thing to do. The present study of the French contract law is based on the premise that, from a law and economics point of view, there exists basically two possible ways to address this concern: the first approach requires that whenever a problem arises, an assessment be made of all costs and benefits incurred by the parties. In other words, one must attempt to evaluate in a sufficiently precise way the consequences of the court decision—or of the rule of law under consideration—for both parties as well as for third parties (including potential future contractors). The lawthen—and more precisely here, contract law—should aim primarily at providing the right incentives to contracting parties, where by ―right incentives‖ one means incentives to behave in such a way that the difference between social benefits and social costs be maximized. It will be argued below that French contract law sometimes follows this approach. The second possible attitude looks, apparently, pretty much like the first. The guiding principle is again that the law should provide to members of the society the right incentives. But one must immediately add that the judge—or the legislator, or the expert—is not in a position to evaluate and pare the social costs and benefits of alternative rules of law. He or she just does not know enough. One does not know, for instance, all the effects of a rule that would 3 allow one party to breach a contract, without the consent of the other party. Indeed, even if the victim of the breach is promised a fair pensation, allowing such a rule globally might have a negative effect on the very purpose of the institution, which is to reduce uncertainty. As a consequence, the law should adopt a goal less ambitious than the maximization of social well being. That goal could be ―to protect contracts,‖ or, in other terms, to create a set of incentives that lead individuals to feel confident that their legitimate expectations will be fulfilled. As pointed out, those two attitudes may appear the same, differing just in degree. The first one assumes more knowledge on the part of lawyers and legislators than the second. However, when it es to practical decisionmaking, differences turn out to be important, because the more knowledgeable you think you are, the stronger will be the incentive to regulate the contract, and the lower will be the respect for tradition and customs on which daily expectations are based. The two approaches outlined above are well known to economists. The first one is the socalled ―mainstream‖ (Paretian) approach and underlines most of the existing economic analysis of The second one, stressing the problem of knowledge, is far less We will call it the ―safetyofexpectations approach,‖ or the Austrian approach to law and economics, because it can be found primarily in thework of the Austrian school of economic thought, and especially in Hayek’s studies. ―The rationale,‖ says Hayek, ―of securing to each individual a known range within which he can decide on his actions is to enable him to make the fullest use of his knowledge, especially of his concrete and often unique knowledge of the particular circumstances of time and place. The law tells him what facts he may count on and thereby extends the range within which he can predict the consequences of his actions. At the same time it tells him what possible consequences of his actions he must take into account or what he will be held responsible for.‖5 The reason why these two approaches are mentioned at the outset is that, when one studies French contract law, it is difficult to reconcile all of it with a single approach. True, the mainstream, neoclassical approach, based on the assumption that rules be chosen that maximize social wealth (or, at other times, that lead to a Paretoefficient oute), can help us to understand an important part of that body of law. But, as will be shown, certain French doctrines cannot be reconciled with neither a Paretian approach, nor a wealth maximizing approach. In some instances, the lawseems to be more concerned with the saf