ABSTRACT
In many states, a supplier in the subcontractor's position has among her options the choice of "rescission and restitution". That means the supplier may rescind the contract and seek, under the label of "restitution", payment set at market price for all the nonreturnable goods and services provided over the course of the project. The price discount that a supplier agrees to in the hope of non-price benefits is a Coasian bribe, and one paid well in advance of the other party's possible breach. Similarly, the goods or services that a supplier provides outside the strict requisites of a contract may be a Coasian bribe. The restitutionary remedy essentially mandates that these bribes be refunded if the recipient breaches the contract; the remedy therefore provides enforcement for Coasian bribes which may be necessary to ensure efficient resource use. This chapter also discusses some of the non-price benefits that might compensate for the monetary discount a supplier may offer.
