We propose a comparison between the expectation measure and arbitration as remedy for inadvertent breach of contract. Our framework is borrowed from Bebchuk and Png (1999). Our key result is that an arbitration clause could be more efficient than court-imposed damage remedies.

The recent reforms of the “judicial map” in Europe have drastically reduced the number of courts, raising fears of a decline in access to justice. This paper addresses this issue through a litigation model within a Salop (1979) framework. We assume that victims of accidents differ both in...