Rights cumulative
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Boilerplate Anatomy™
A “typical” rights cumulative clause:
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Somewhere, once upon a time, one of our learned friends must have had a near-death experience, psychotic episode, or somehow hit on the paranoid thought that a cause of action conferred by contract might inadvertently squish an analogous one arising at common law or under a statute.
Well, it might, but only where the theory of the game suggests it should — and there, you shouldn’t need a “rights cumulative” clause and, if you have one, it won’t work anyway.
Where it will work, the proposition that “unrelated rights are cumulative where they don’t overlap” goes without saying, so — well, you don’t need it there, either.
The limited case for rights cumulative: where your legal eagles have made your position worse
Over the centuries the common law, as we know, has done a fine job of shaping and polishing a merchant’s remedies for breach of contract: — remedies which are, broadly, indifferent to what the contract happens to say.
The reason for that is simple: by the time a merchant comes to ask about its rights upon breach, the instrument that conferred them is broken.
Fruity expectations of a healthy, long and fecund forward relationship lie suffocating upon the salted earth. The contract is the proverbial “ex parrot”: it is no longer a reliable guide to how one should expect the other to behave. The defaulter is a defaulter and cannot be relied upon to do what she promised to do. So, nor is the aggrieved party be expected to carry on doggedly popping coppers in the slot: the common law asks that she conducts herself reasonably and with good faith in the circumstances; it does not demand a total want of common sense.
The sacred pact having fractured, it is for the court to draw upon its centuries of analogy to put the matters right.
It does that by reference to its own principles, not the contract’s: causation, contribution, foreseeability and determinacy of loss. the court applies these to the deal the suitor thought it had to work out a juridical compensation for its loss of bargain.
That is the magnificent furniture the laws of England bestow upon us. It seems counterproductive — passive aggressive, almost — for a party to insist, in detail, on what should happen its customer does not do it promises to do. Bloody-minded, almost.
Where the contract involves a bank, though — especially one that is lending you money — it is de rigueur. Banks like to rule out doubt, help themselves to extra rights: liens, set-off, netting of liabilities — banking contracts are a kind of research and development department where clever people contrive intricate clockwork escapements governing the grounds on which they deploy capital. Here “ex-parrotness” is the overriding mischief a lender seeks to manage, and legal eagles like to reinforce the ancient customary rules of contract.
It isn’t that the common law is no good; it is just that where you clearly foresee a specific breach, a contract can be better. The law of unintended consequences rules the world of finance, though, and it is not hard to imagine carefully drawn contractual terms working out worse than the general rules relating to fundamental breach. Hence this boilerplate: careful provisions designed to assist a wronged party should not be allowed to get in the way of general law of contract if it would work out to be better, and this slug of boilerplate is meant, to ensure — by means of contractual term — that they do not.
But “proactively” legislating for defaults, potential defaults and the exercise of drastic rights that follows them is what finance lawyers do. The common law is all well and good: when money is at stake we can be better. Look, we are amongst financiers; we should expect paranoia.
There is an extra piece of paranoia. It is a sort of meta-paranoia. What happens if, in carefully writing down all my drastic default rights I inadvertently undo some better right that I might have at common law? The common law evolves. Who knows what clever tricks it might devise. Does my clever, eagley contract by oversight cut off some better, quicker remedy I might have had just by declaring repudiation and suing for damages?
Most of the time, you would think, it should not, but if it does, “rights cumulative” is your chosen slug of boilerplate.
Statutory rights, copyright and all that stuff
I might pass you my manuscript under a confidentiality agreement: your publication of it in breach of that agreement may entitle me contractual damages, but my direct losses as a result — the traditional measure of contractual damages, of course — might add up to a lot less than your resulting profits — which the common law might regarded as unreasonably speculative losses beyond the reach of an aggrieved contracting party — as a result.
No matter: because I hold the copyright in the manuscript, I can exercise my statutory right to have you account to me for those profits too — but where my contractual damages and your profits coincide, I can only recover once. There is an arid intellectual discussion to be had about which prevails in a time of conflict. Nothing hinges on it, but it seems to the JC that one’s proprietary statutory rights under a copyright pre-exist any rights you might have under this or that contract, so a claim for lost profits through breach of copyright always comes first. This means the contractual damages under a confidentiality agreement in and of itself are likely to be meagre. This is a perennial problem with confidentiality agreements, and is the reason for all that mush about equitable remedies and injunctions.
Where was I? There is no suggestion that a fellow waives her copyright by signing a contract (unless the contract clearly says that), so she should hardly need a rights cumulative clause to satisfy herself that her rights are cumulative, unless she deliberately waived them, where they won’t be.
Concurrent liabilities?
Sometimes, rights arising in different magisteria of the law aren’t cumulative. That is inevitable, you should embrace it, and a hastily injected “rights cumulative” clause is a chocolate teapot anyway.
There is generally no concurrent liability, for example, in contract and tort, because they are the yin and yang of civil liabilities: tort is the system of rights and obligations that are presumed to exist between otherwise unconnected souls whose existences happen to interfere with each other, but who haven’t directly agreed what the rights and obligations between them should be — “neighbours”, in Lord Atkin’s well-oiled phrase, but not “lovers” (in mine).
Tort is the business of describing the elusive point at which strangers become neighbours, and articulating a practical public morality between them of the sort that hateful fellow on the Clapham Omnibus might contrive. Those presumptive, “when all else fails” rules fall away when neighbours become intimate enough to agree specific bilateral rules of engagement between them. Then they are contracting counterparties, and those specific rights and duties they have worked out for themselves — their contractual obligations — override the general principles that tort would otherwise apply. It is true that a tortious relationship will pre exist a contractual one — it is hard to get close enough to someone else to engage in intimate contractual relations with them without becoming neighbours first — but seeing as the very point of a contract is to dispell all those uncertainties, it seems to me contractual obligations are, at their essence, intended to dispel tortious ones.
So if I have, in full possession of my senses, agreed to do something unreasonable or stupid, and you, in yours, have agreed to pay for it, I cannot appeal to rules derived from misadventures with gifted ginger beer, escaping wild animals and mis-hit cricket balls to excuse my commitment.
Now construction lawyers will jump up and down and say “but what about Henderson v Merrett?” and they will have some colour of justification for doing so — see concurrent liability for more — but none of this really impinges on financial contracts, and quietly I’m not sure there is genuine concurrence, even there.