Efficient breach theory

{
  "id": "MLC-T-LAW-001812",
  "term": "Efficient breach theory",
  "field": "Law",
  "definition": "A legal and economic concept asserting that a party should be allowed to breach a contract if doing so would result in a more efficient allocation of resources, provided the non-breaching party is fully compensated for their losses. This theory posits that such breaches can lead to an overall increase in societal wealth. It is a controversial idea in contract law, as it prioritizes economic efficiency over the moral obligation to keep promises.",
  "url": "https://mlchart.com/terminology/law/efficient-breach-theory/"
}