MARCELLO LAW OFFICES
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Efficient Breach

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In law and economics there exists the theory of Efficient Breach. Simply put, sometimes incurring the liability from breaching a contract is a good thing for everyone. The theory works as follows:

Imagine I have a baseball bat. If you were to go to a store to purchase that bat, it would cost you $50, but I am willing to sell you mine for $40. We agree that you will buy it for $40. You are saving $10 from what you would have to pay at the baseball bat store. Before you give me the money, a baseball player comes up to me and says, “I heard that you have a baseball bat to sell. I am late for my game and I need that bat. I will give you $100 for it.” If I accept the $100 and don't sell you the bat, I have breached my contract with you.

The idea of efficient breach is that by breaking the contract with you I am improving the economy and benefiting 4 people by doing so. The baseball player is benefited because he needed a bat and he got one. You are benefited because you wanted a baseball bat for $40, and when I give you $10 you will have the money to go to the store and purchase one. I benefit because I am able to sell my bat for extra money. The store benefits because they now get an extra customer they would not have had.

Not all breaches are bad. If everybody is able to get what they want, a breach can be good. We call that an efficient breach.

What does that mean for a landlord/tenant issue? Simply that, in Allegheny County and throughout Pennsylvania landlords tend to be people too. Having a conversation with your landlord can go a lot further than you may think. Perhaps they wouldn't mind helping you out and getting a replacement in for a negotiated cost.

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11676 Perry Highway
Suite 1302
Wexford, PA 15090
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​MarcelloLawOffices.com


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​Williamsport, PA 17702

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  • Practice Areas
    • Criminal Defense >
      • Summary Offenses
      • Driving Under the Influence
      • Misdemeanors
      • Felonies
      • Expungements
    • Civil Litigation >
      • Collections
      • Personal Injury
      • Home Improvement Fraud
    • Veterans Interest >
      • VA Appeals
      • VA Claims
  • Legal Help Guides
    • Landlord / Tenant Law >
      • Introduction
      • History
      • Breaking a Lease >
        • Four Corners
        • Constructive Eviction
        • Efficient Breach
        • Landlord Breach
      • Damages
      • Security Deposit
      • Conclusion
      • Unfair Trade Practices and Consumer Protection Law