Government frequently responds to crises (like 9/11 and Hurricane Katrina) with laws that have retrospective effects on existing contracts. Because these laws are usually constitutional, the promisee has no claim against the government. The promisor, however, will probably obtain an excuse from the contract because performance is now either illegal or impaired by government acts or orders. The promisor is in what can be called “the Zone of Coercion.” If excuse is granted, the contract is discharged but the promisee, because of limited remedies, will not be restored to its pre-contract position. Thus, the promisee’s contract rights are casualties in what amounts to a constitutional taking by the government.

 

This book traces and critiques the development from 19th-century England to the present of excuse doctrine and its application by courts in “the Zone.” The development of more general contract excuse doctrine and different theories about excuse — such as economic analysis and behavioral decision theory — are also traced in both private and public contracts.