CONTRACT LAW

Contract Law

Contract Law

Introduction

There are practical reasons for distinguishing between tort and contract when deciding how a claim is to be made. The remedy for breach of duty in tort is usually a claim for damages, though equitable remedies are also available in appropriate cases. The main aim of tort is said to be compensation for harm suffered as a result of the breach of a duty fixed by law. Tort seems to place greater emphasis on wrongs of commission rather than wrongs of omission. Another important aim of tort is to deter behaviour which is likely to cause harm. The main aim of contract on the other hand is to support and enforce contractual promises, and to deter breaches of contract. Contract, then, has no difficulty compensating for wrongs of omission.

Background

The doctrine of consideration, in contracts is based on mutual promises, is all important in the law of contract, and failure by omission to keep the terms of a promise is a breach of contract which the law will seek to amend. The distinction in practice is less clear, as many fact situations could give rise to an action in both contract (if there is a contract in existence) and tort. Numerous examples of this are to be found in cases of professional negligence, for example, where the parties may also have a contractual relationship (doctors, surveyors, architects, etc). In such cases, it again becomes necessary to decide whether to sue in contract or in tort. However, it often makes little difference to the outcome which branch of the law is chosen (Johnstone v Bloomsbury AHA [1991] 2 All ER 293).

The considerations which may be relevant to the choice of contract or tort are that there may be more generous limitation periods (time limits) within which to bring an action in tort rather than in contract. In tort, the claimant's cause of action arises when the damage is suffered, but under the rules of contract, it arises when the contract is breached, irrespective of when the damage occurs. The need to prove fault is not always present in contract, whereas it is frequently necessary to do so in tort; and the range of remedies and amount of damages which are available in tort may be greater than in contract. The rules for determining remoteness of damage differ as between contract and tort. In tort, under the rule in the Wagon Mound case (Overseas Tankship (UK) Ltd v Morts Docks Engineering Co Ltd [1961] AC 388, there may be liability for highly unlikely results of a tortuous act, but in contract, a substantial degree of probability is required. In tort, forcibility of damage is required at the moment the tortious act is committed, whereas in contract the relevant time is when the contract is concluded. There are also differences in relation to the concept of contributory conduct on the part of the claimant. In tort the defence of contributory negligence is of general application, but in contract it will ...