Subject Area

Legal Profession; Contracts; Securities Law; Injury and Tort Law


The BP Deepwater Horizon oil spill and the Toyota car recalls have highlighted an important legal anomaly that has been overlooked by scholars: judicial inconsistency and confusion in ruling whether to compensate for the loss in market value of wrongfully affected property. This Article seeks to understand this anomaly and, in the process, to build a stronger foundation for enabling courts to decide when-and in what amounts-to award damages for market value losses. To that end, this Article analyzes the normative rationales for generally awarding damages, adapting those rationales to derive a theory of damages that covers market value losses, not only of financial securities (such as stocks and bonds) but also of ordinary products (such as automobiles and lightbulbs).