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Licensed Unlicensed Requires Authentication Published by De Gruyter December 30, 2011

Damages for Breach of Duty in Corporate Disclosure

  • Urs Schweizer
From the journal Review of Law & Economics


Information provided by an agent affects the prices at which equity transactions take place. The agent may breach his duty either by spending too little effort at investigating relevant matters or by unduly manipulating the obtained information. As a consequence of such breach of duty, market participants may suffer from losses. Legal systems provide a rather disparate array of remedies without providing a coherent theory that would support the design of these remedies. The present paper proposes a general principle according to which courts may award expectation damages and it identifies sufficient conditions under which such damages would generate incentives for the agent to investigate with due care and to duly disclose the information.

Published Online: 2011-12-30

©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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