A Not Intractable Problem: Reasonable Certainty, Tractebel, and the Problem of Damages for Anticipatory Breach of a Long Term Contract in a Thin Market

This Note analyzes the tension between anticipatory repudiation and reasonable certainty when both doctrines are applied to a long-term contract in a thin market. It shows that each doctrine is an efficient doctrine, but that as contractual term lengthens the doctrines begin to conflict and efficiency may be lost. It then looks at the case of Tractebel v. American Electric Power as an example of this potential conflict. It shows how the District Court reached a clearly inefficient result before the Second Circuit reversed. It then shows that the Second Circuit’s opinion relies on doctrine giving the court wide discretion in awarding damages. This Note concludes by suggesting that a “best shot” rule for contract damage awards is a more efficient remedy than current doctrine and would enable courts to more accurately award damages in long-term contracts in thin markets.