Center for Law & the Economy Workshop: Sarah Dadush (Rutgers)
"Shared Responsibility in American Contract Law"
Professor of Law at Rutgers Law School
More Information
Rescheduled: The new date for this event is Friday, October 24, 2025 at 11:00-12:20 PM in Room 151 of Weinmann Hall.
The Murphy Institute's Center for Law and the Economy hosts workshops each semester featuring Tulane and guest faculty from the fields of law, economics, and political science. Presenters share their latest research on a range of topics, including regulation, civil rights, the criminal legal system, and other key issues in law and political economy. Papers are distributed beforehand to the participants who read the paper and prepare discussion questions for the presenter.
The workshops, organized by Adam Feibelman, Director of the Center on Law and the Economy and Sumter D. Marks Professor of Law at Tulane Law School, are open to faculty, students, and the Tulane community. The Fall 2025 workshop series, co-convened by Associate Professor of Law and Murphy Affiliate Faculty Mateusz Grochowski, will focus on themes in consumer law, broadly construed.
Sarah Dadush is a Professor of Law at Rutgers law School. She writes and teaches in the areas of contracts, business and human rights, consumer law, and social enterprise law. Her scholarship explores hard and soft law mechanisms for improving the social and environmental performance of multinational corporations.
Abstract:
At first, the notion that there is such a thing as shared responsibility in American contract law may sound fanciful, if not absurd. A key reason why parties contract in the first place is to allocate risks and responsibilities between them to clarify who must do what to move the collaboration forward. As such, contractual obligations are understood to be binary, belonging either to one party or the other, not both. In practice, this means that, if there is a breach, only the obligated party will be held responsible, not both. And, if remedies are awarded, they will flow only from the breaching to the non-breaching party, not between them. Thus, the proposition that the parties might be contractually responsible not just for their own obligations, but also for those of their counterparty, seems incoherent.
And yet, as this Article shows, courts frequently go beyond the express terms of the contract to make the parties share responsibility for the performance of one another’s obligations. Thus shared responsibility: Each party is held responsible for the other’s contractual (non)performance, even in the absence of an express commitment to share responsibility for performance. This Article “goes fishing” for shared responsibility in three key areas of contract law: The contents of the contract, breach, and remedies. It demonstrates that shared responsibility is brought to bear to resolve contract disputes more often and with greater legal effect than the simple binary understanding of contract might predict. When it enters the judicial analysis, shared responsibility can drastically change the answers to the questions: Who had the obligation to perform? Who breached? And, finally, whose harm should be remedied and how?
Having shown that shared responsibility is already a prominent, if overlooked, feature of American contract law, this Article argues that, in certain situations, courts should employ shared responsibility as a default rule. Specifically, courts should employ a shared responsibility default (SRD) when the contract was breached, or otherwise failed, and (1) both parties contributed to the failure, and (2) the failure could, or has already, generated high social costs (e.g., public endangerment, human rights violations in supply chains, consumer deception). In such situations, the SRD would activate the tort law principles of comparative negligence and proximate cause in contract to hold both parties accountable for their respective contributions to the breach and related social costs. The SRD would equip courts to set more robust incentives for contract parties to behave well, not just toward one another, but also toward non-parties, promoting both contract and public policy objectives.
