Template:Concurrent liability: Difference between revisions
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[[Mediocre lawyer|Brethren attorneys]] will occasionally caution you that the four corners of a {{tag|contract}} might not be the extent of your liability: You might get sued in [[tort]]. | |||
Extraordinary though it seems, technically it is true. Lord Scarman’s sensible observations in {{casenote|Tai Hing Cotton Mills|Liu Chong Hing Bank}}, that there isn’t “anything to the advantage of the law’s development in searching for a liability in tort where the parties are in a contractual relationship” has been long since overruled - 1995’s {{casenote|Henderson|Merrett}} being a prominent example. | |||
But these are typically “builders’ liability” cases where a defendant built a house for Person A, who sold it to Person B, upon whom it collapsed. Uniquely here, there is a gap between contractual bat and pad: | |||
*Person A has a contract, and therefore a [[cause of action]] for breach against the defendant but, sold the house at full value and has suffered no [[loss]]. | |||
*Person B has suffered a [[loss]] all right, but has no contract with (and therefore no [[cause of action]] for [[breach]] against) the Defendant, and cannot sue Person A who was innocent of any knowledge of the defect when it sold the house. | |||
Equity suggests Person B deserves compensation, and the defendant deserves to pay it, but the strict contractual lines get in the way. A concurrent duty in tort owed by the builder to that narrow and determinate group of neighbours — people who end up owning the house in the six years after it builds it — is a neat way of plugging the gap. | |||
These are unusual cases. In the normal run of things there’s little to be said for [[concurrent liability]]. In a straightforward bilateral contract with no aggrieved Person B, it would be absurd for tortious duties that arise at general law to widen or constrict the allocation of risk set out in the contract. You can contract out of tortious duties (even if that isn’t obvious in principle to you, Lord Goff said so in {{casenote|Merrett|Henderson}}). Unless your contract is uncommonly vague, by just having one you will have done so. You can always explicitly exclude tortious liability in the contract if you are really worried about it (though it does look a little “[[for the avoidance of doubt]]” to this pair of eyes. It’s not hard to do: | These are unusual cases. In the normal run of things there’s little to be said for [[concurrent liability]]. In a straightforward bilateral contract with no aggrieved Person B, it would be absurd for tortious duties that arise at general law to widen or constrict the allocation of risk set out in the contract. You can contract out of tortious duties (even if that isn’t obvious in principle to you, Lord Goff said so in {{casenote|Merrett|Henderson}}). Unless your contract is uncommonly vague, by just having one you will have done so. You can always explicitly exclude tortious liability in the contract if you are really worried about it (though it does look a little “[[for the avoidance of doubt]]” to this pair of eyes. It’s not hard to do: | ||
{{box|This is a contract. Neither party will be liable to the other in tort under this agreement.}} | {{box|This is a contract. Neither party will be liable to the other in tort under this agreement.}} | ||
Revision as of 10:54, 19 September 2018
Brethren attorneys will occasionally caution you that the four corners of a contract might not be the extent of your liability: You might get sued in tort.
Extraordinary though it seems, technically it is true. Lord Scarman’s sensible observations in Tai Hing Cotton Mills v Liu Chong Hing Bank, that there isn’t “anything to the advantage of the law’s development in searching for a liability in tort where the parties are in a contractual relationship” has been long since overruled - 1995’s Henderson v Merrett being a prominent example.
But these are typically “builders’ liability” cases where a defendant built a house for Person A, who sold it to Person B, upon whom it collapsed. Uniquely here, there is a gap between contractual bat and pad:
- Person A has a contract, and therefore a cause of action for breach against the defendant but, sold the house at full value and has suffered no loss.
- Person B has suffered a loss all right, but has no contract with (and therefore no cause of action for breach against) the Defendant, and cannot sue Person A who was innocent of any knowledge of the defect when it sold the house.
Equity suggests Person B deserves compensation, and the defendant deserves to pay it, but the strict contractual lines get in the way. A concurrent duty in tort owed by the builder to that narrow and determinate group of neighbours — people who end up owning the house in the six years after it builds it — is a neat way of plugging the gap.
These are unusual cases. In the normal run of things there’s little to be said for concurrent liability. In a straightforward bilateral contract with no aggrieved Person B, it would be absurd for tortious duties that arise at general law to widen or constrict the allocation of risk set out in the contract. You can contract out of tortious duties (even if that isn’t obvious in principle to you, Lord Goff said so in Merrett v Henderson). Unless your contract is uncommonly vague, by just having one you will have done so. You can always explicitly exclude tortious liability in the contract if you are really worried about it (though it does look a little “for the avoidance of doubt” to this pair of eyes. It’s not hard to do:
- This is a contract. Neither party will be liable to the other in tort under this agreement.