Reform and Damages for Breach of Contract in the Soviet Economy

Reforms in remedies for breach of contract emerging under perestroyka have as a main goal a reduction in the use of penalties in favor of compensation for damages. As background to these reforms, the basic principles of the Soviet law of contract damages are outlined, and the law's operation in practice under the traditional planning system is examined. Western economic theories of the choice of contract remedy are used to analyze the underlying causes of the difficulty of measuring and proving damages in the pre-reform system. Emerging reforms in contract remedies are described and evaluated in light of this analysis. journal of Economic Literature, Classification Numbers: 052, 124.