Degrees of liability

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The basic principles of contract


Formation: capacity and authority · representation · misrepresentation · offer · acceptance · consideration · intention to create legal relations · agreement to agree · privity of contract oral vs written contract · principal · agent

Interpretation and change: governing law · mistake · implied term · amendment · assignment · novation
Performance: force majeure · promise · waiver · warranty · covenant · sovereign immunity · illegality · severability · good faith · commercially reasonable manner · commercial imperative · indemnity · guarantee
Breach: breach · repudiation · causation · remoteness of damage · direct loss · consequential loss · foreseeability · damages · contractual negligence · process agent
Remedies: damages · adequacy of damages ·equitable remedies · injunction · specific performance · limited recourse · rescission · estoppel · concurrent liability
Not contracts: Restitutionquasi-contractquasi-agency

Index: Click to expand:

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The ladder of liability

In some strands of legal endeavour (notably in the criminal law and the tortious world of civil wrong-doing, one’s mental state is important in assessing one’s responsiblity; in others (principally the cool and dispassionate law of contract) it is — for the most part — not.

Where the inadvertent is blameless, neither knowing the risk she runs, nor being reasonably expected to be able to anticipate it; and the negligent has some civil, civic responsibility for what befalls his neighbour on the premise that, since that odious hypothetical fellow plucked from the pews of the sacred Clapham omnibus would have seen it, so should he, even though in point of fact he did not; the grossly negligent is a poor, confused, careless American; the reckless sees the risk, all right, and decides to plough on and take it, notwithstanding, that she might have no particular wish or expectation that a calumny should befall anyone, least of all the plaintiff.

The intender, in contrast to all those above, does what he does as a matter of cold-blooded, contemptuous calculation.[1]

Now the standards as between crimes and torts diverge. We know at one end are the innocent, faultless lambs, at the other wanton brigands; but how the varying stages between fit together is by no means clear. We have had a half-hearted go, but be warned, it was a Friday afternoon, and we got approached knock-off time we swiftly lost interest. This is probably a good example of negligence.

Right, where’s that beer?

Criminal Tort Contract Description
Inadvertence Inadvertence Inadvertence Neither intended, wanted, foresaw, nor can reasonably have been expected to foresee the calamity that in fact came about. Had no bearing on any duties, implied or explicit, arising between us.
Negligence Negligence A reasonable person in that position would have foreseen the incipient calamity which would come about by following this course of action, but our hero, in actual fact, did not. Ergo, an unreasonable person.
Default You have agreed to do something, received consideration for it and, whether by accident or design, you didn’t do it. This is the contractual equivalent of negligence: you had a duty, and you fell short of it.
Wilful default You have agreed to do something, received consideration for it and, on purpose, you didn’t do it. (This is the same as default, by the way. No-one cares why you didn’t do it).
Gross negligence Even a faintly moronic person in that position would have foreseen the incipient calamity which would come about by following this course of action but our hero in actual fact did not. Ergo, a stridently moronic person. Unclear how there is room for this in a contract given normal default and the already redundant wilful default.
Recklessness Our hero did foresee the incipient calamity and, while not wanting it, boxed on regardless.
Intention Not only foresaw the calamity but acted fully intending it to come about.

References

  1. This use of the word “calculation” might upset some tort lawyers, for in legal terms to be “calculated” means expected to happen as a matter of probability, rather than mendacious design. Odd, really.