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Liability in tort and contract arise from different principles of law

Introduction

Liability in tort and contract arise from different principles of law. As such liability of tort and contract are not generally overlapping. However, there may be cases and situations where the liability in tort and contract may overlap. This is called as concurrent liability. Under this, a cause of action may arise in law of tort, even where the parties are in a contractual relationship.

This essay discusses the scope of concurrent liability in tort and contract. First, the essay discusses the differences in tortious and contractual liability. Next, the essay discusses the nature of concurrent liability and how such liability in tort can arise in a case where the parties are in a contractual relationship.

Difference between liability in tort and contract

Tortious liability and contractual liability arise from different principles. Contract liability arises from the breach of a contractual duty as between two parties, specified under a contract. Contracts are between specified parties and therefore, the doctrine of privity of contract makes the nature of contractual liability in personam. Breach of contractual duty gives rise to some remedies, including specific performance of contract, liquidated damages and sometimes even unliquidated damages (Best & Barnes, 2007, p. 578).

Tortious liability does not need a contract between two parties and as such it arises from the breach of a duty primarily fixed by law. The duties are towards persons generally and therefore the nature of liability is in rem. Tort actions generally ask for remedies such as injunctions, unliquidated damages, etc.

An example of contractual liability is seen in a case where the offer was made generally to the world by the defendant company, which was held bound under a contract made when it advertised its smoke ball (offer) as a preventive remedy against flu, which was accepted by the buyer when he used the smoke ball. The defendant was held liable to pay damages for breach of contract when the buyer caught the flu (Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1, 1892). An example of an interplay between contract and tort is seen in the landmark case of Donahue v Stevenson. In this case, the court held the manufacturer of ginger beer liable for negligence after a customer fell ill after finding a dead snail in the beer bottle that she had drunk out of. The manufacturer was asked to pay damages to the customer (Donahue v Stevenson [1932] UKHL 100, 1932). The interesting part here is that the actual contract was between the supplier and the friend of the victim. However, the neighbor principle was articulated by the House of Lords to ensure tortious liability by a party to another in the absence of a contract. However, this case is not an example of concurrent liability although it does show how liability in tort can be applied in cases in the absence of a contract.

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Concurrent liability

Concurrent liability is applied in cases where there is a contract as between the two parties, however, cause of action can arise in contract as well as tort. Generally speaking, this kind of liability arises in cases of negligence. One area of this is the sale of unsafe products by the seller. Here, the buyer and seller have a contract, therefore the action will arise in contract. However, due to the sale of unsafe product, if there is a damage or loss suffered by the buyer, action for negligence will also lie in tort. Therefore, a victim of an unsafe product can bring either or both of contractual and tortious actions against the seller (Miller & Rukawina, 2009, p. 97). Under the law of tort, an action for negligence can be filed (Donahue v Stevenson [1932] UKHL 100, 1932). As per this concurrent liability will arise and the manufacturer or seller can be made liable for the faulty product in the law of tort, even though there is a contractual relationship between the parties. Due to the contractual relation as between the parties, the buyer can even utilise breach of warranty or condition to enforce liability for faulty product. Despite the availability of this remedy, the buyer would choose to sue under the law of tort as this would give him an opportunity to claim unliquidated damages. In a case, the concurrent liability in professional relationships was discussed and the court held that concurrent liability is an acceptable feature if the English law (Hendersen v Merrett Syndicate (1994) 3 All ER 506, 1994). However, the availability of the concurrent liability cannot be used by a person to circumvent his contractual liability (Central Trust Co v Rafuse (1986) 31 DLR (4th) 481 , 1986). The applicability of concurrent liability is seen in contracts for professional services, such as solicitor’s services. Here, the solicitor, apart from his liability in contract may also be liable in tort and may have a duty to take care, which may be held violated by some negligent act or misstatement of the solicitor (Phillips, 2016, p. 47). One such case saw the court establish a duty of care in case of statements where the contractual relationship between the parties is sufficiently proximate to establish such a duty (Hedley Byrne & Co Ltd v Heller & Partners Ltd, [1964] AC 465, 1964). In another case, where the Hedley principle was specifically referred to, the court held that the tortious liability for misstatements may arise irrespective of a contractual relationship as between the two parties (Sumitomo Bank v Bank Bruxelles Lambert SA (1997) 1 Lloyds Rep 487, 1997). In fact, the court held that tortious liability may be more onerous than the contractual one (Sumitomo Bank v Bank Bruxelles Lambert SA (1997) 1 Lloyds Rep 487, 1997).

Conclusion

Tortious liability and contractual liability, despite proceeding from different principles may be found to be concurrent in certain situations, such as those involving professional relations between two parties. In such situations, liability may arise in contract as well as in tort.

Bibliography

    1. Best, A. & Barnes, D., 2007. Basic Tort Law: Cases, Statutes, and Problems. New York: Aspen Publishers.
    2. Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 (1892).
    3. Central Trust Co v Rafuse (1986) 31 DLR (4th) 481 (1986).
    4. Donahue v Stevenson [1932] UKHL 100 (1932).
    5. Hedley Byrne & Co Ltd v Heller & Partners Ltd, [1964] AC 465 (1964).
    6. Hendersen v Merrett Syndicate (1994) 3 All ER 506 (1994).
    7. Miller, W. & Rukawina, S., 2009. Canada. In: C. Campbell, ed. International Product Liability. s.l.:Lulu.com, pp. 97-103.
    8. Phillips, S. F., 2016. Ethics of the Legal Profession. Oxon: Routledge.
    9. Sumitomo Bank v Bank Bruxelles Lambert SA (1997) 1 Lloyds Rep 487 (1997).

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