Of Ceilings and Flaws: An Analytical Approach to the Minimum Performance Rule in Contract Damages

The minimum performance rule applies where the defendant who has repudiated his contract would have had a choice as to how to perform it. The rule requires that damages be assessed on the basis that the defendant would have chosen to perform in the least onerous manner. Two principal criticisms of the rule are made. The first is that the rule's fundamental assumption, that minimum performance is all the claimant is entitled to, rests on a flawed understanding of what it means to have a choice as to how to perform a promise. The second concerns the rule's application to consequential loss. Where the benefit of which the claimant has been deprived comprises consequential, as opposed to immediate, loss the absence of an entitlement to that benefit is not a bar to recovery, liability being limited by the doctrine of remoteness instead. The article then considers whether the rule has a continuing role in contract law. Given that those cases within its remaining area of application, being claims for the recovery of contractual benefits as to which the defendant made no promise, are not, properly considered, minimum performance cases at all, the conclusion reached is that the rule should be abandoned.