Remedial Clauses: The Overprivatization of Private Law

This Article considers the growing trend to enforce liquidated damages agreements or what I think are more felicitously called “remedial clauses.” I criticize this trend on the grounds that a permissive approach to enforcing remedial clauses contravenes important public values. Although many have claimed the traditional presumption against such clauses is mysterious or unsupported, I contend that the traditional presumption against such clauses enforces important values central to the rule of law, including that private parties should not decide their own cases and that the public has a special interest in deciding what remedies are appropriate for breaches of legal duty. In delineating the theoretical foundations for treating remedial clauses differently than performance terms, I offer a distinctive, liberal, and democratic perspective on contract and contractual breach that answers the common arguments offered by libertarians and law and economics scholars that freedom of contract requires the contrary.