Wilful default
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Negotiation Anatomy™
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The one, bastard part of that sainted triplet “negligence, fraud or wilful default” without an obvious legal meaning. The Americans call it wilful misconduct, which is even more baffling.
Whereas “negligence” and “fraud” are terms of forensic science — the former hailing from the common law of tort, being the failure to observe the standards of the sort of fellow one might encounter on the Clapham omnibus; the latter hailing from criminal law[1] and involving a false representation, knowingly made, with the intent to profit from it — “wilful default” has no such lineage.
The “default” part suggests a contractual breach, but we feel there is a rather better word for that — “breach” — and in any case the wilfulness, wantonness or licentiousness of one’s behaviour under while misperforming a contract has never been of any great interest to those who sit on the Queen’s Bench Division: what matters is that you have breached it. If you have, you are for it, however obstreperous your frame of mind while you did, or didn’t, do what you shouldn’t, or should, have done. The release from exactly that anxiety is the very beauty of contractual relations: one need not care a jot about your counterparty’s intentions; what matters is her actions. That she does what she must do through gritted teeth or with the heaviest of hearts need not bother you.
So changing outcomes depending on the mental state of your counterparty seems a rum affair. There is limited call for the sainted triplet in any contract in the first place — the very reason you enter a contract is to slip these sanctimonious strictures of the general civil law — but where you are raining in an indemnity where, by definition, there hasn’t been a breach of contract (right?) there is at least a good reason to impose a different standard.
See also
References
- ↑ Interestingly, the there is no tort of fraud; it is called “deceit” and was ably summarised in The Kriti Palm as follows: “The elements of the tort of deceit are well known. In essence they require (1) a representation, which is (2) false, (3) dishonestly made, and (4) intended to be relied on and in fact relied on.”