Contractual and tortious liability

Contractual and Tortious Liability (with Leading Cases)

Contractual and tortious liability may arise from the same set of facts. In such cases, what is the remedy under tort law and in the law of contracts? In this blog, we have discussed this with help of relevant case laws.

Understanding Contractual and Tortious liability

Many a time, it may happen that a person binds himself voluntarily by an agreement to perform some duty but the said duty already lies upon him independently of any contract or agreement. Therefore, in such cases, the breach of such contract is also considered a tort. To take an example, suppose where a railway passenger is injured, he has a right to sue the railways either for breach of contract of safe carriage or for showing negligence (i.e., tort) in carrying him.

Likewise, assume a person while going out of station leaves his horse with a neighbour for a few days and the neighbour does not feed the horse. Due to this, the horse dies of starvation. In this case, there is not only a breach of contract on the part of the bailee as he fails to exercise reasonable care but he has also committed a tort of negligence. Therefore, concurrent liability exists in tort as well as contract law.

Now whenever such a situation arises and there is a concurrent liability in tort and contract law, the plaintiff cannot claim the damages twice. Rather he can sue the defendant either for breach of contract or for the commission of tort of negligence, etc.

Remember contractual and tortious liability arises simultaneously in certain cases, for example, a doctor or surgeon is under a concurrent liability in tort and contract. But an architect or a solicitor is not. 

Is a contract capable of curtailing the liability under tort?

A tort is nothing but a violation of a person’s right conferred by law. No contract between two parties is capable of modifying or curtailing the law. Hence, no clause of exemption in a contract can be held valid to exempt a party from his tortious liability. This was discussed in the leading case of White v John Warwick & Co. Ltd. [(1953) 2 All ER 1021].

Relevant case laws (on Contractual and tortious liability)

White v John Warwick & Co. Ltd. [(1953) 2 All ER 1021]

In this famous case, a contract of hire for a carrier tricycle stated that “nothing in this agreement shall render the owners liable for any personal injury caused to the riders of the machine hired.” The machine was malfunctioning, and the hirer got injured. The plaintiff (or hirer) filed a claim for damages against the defendant company. The defendants rested their defense on the aforementioned clause of the contract.

It was observed that there was negligence on the part of the owners and they owed a duty of care to the hirer, i.e., the plaintiff. They failed to take proper care to ensure that the machine (the tricycle) was in proper working condition. Thus, a breach of duty gave rise to tort and it could be established even without relying on any contract at all.

It was held that an action for damages may arise both in tort and contract law from the same set of facts. An action for breach of contract in a contractual relationship between the parties may co-exist with a right of action for negligence on the part of one of the parties. In fact, such a claim for negligence in tort law can arise independently of any contract or agreement between the parties. Moreover, no exemption clause of a contract can exempt a party from fulfilling his duty of care conferred upon him by law. Hence, it was held that the plaintiff can recover damages.

Dickson v Reuter’s Telegram Company (1877)

In this case, it was emphasized that in order to constitute a liability in tort, there should exist a relationship that gives rise to a duty of care between the parties. If the relationship does not give rise to any duty of care to the plaintiff, then no action in tort can be maintained.

For example, if a message is mistakenly delivered by a telegram company to a person to whom the message was not intended to be delivered and due to this, he suffers any damage, no action will lie in tort. This is so because neither there is any privity of contract between the parties nor there is any duty of care cast upon the telegram company to the plaintiff independent of any contract between them.

Donoghue v Stevenson [1932] A.C. 562

If X and Y have entered into a contract and a wrongful act on the part of X results in a breach of contract with Y and also a commission of tort against Z, a stranger, it was thought that just like Y, Z also has to show privity of the contract before any action can lie in tort. The introduction of this “privity of contract fallacy” into the law was done by Winterbottom v Wright case (1842).

However, in the case of Donoghue v Stevenson (1932), it was found that an action in tort is independent of a contract and the rule that the privity of a contract is needed to make an action in tort is unjust and irrelevant. Therefore, a consumer can bring an action against a manufacturer even though there is no contract or agreement between the consumer and the manufacturer.

A manufacturer owes his duty to the ultimate user or consumer. This duty has originated from the law of tort and not the law of contract. Therefore, even if the contract is only between the manufacturer and the retailer, there is still a duty on the part of the manufacturer to the consumer.

Grant v Australian Knitting Mills Ltd. [(1936) A.C. 85]

“A” had purchased woollen garments from the retailer “B” which were originally manufactured by M & Co. After wearing the garments, A suffered from dermatitis. It was held that A can claim damages from M & Co. even though no contract existed between the manufacturer and the consumer. He cannot claim damages from the retailer, i.e., B.

Sheikh Mohamed v. The British Indian Steam Navigation Co. [(1908) 32 Mad. 95]

In this case, it was pointed out that a contract by the bailee that seeks to completely exempt himself from the liability for negligence is not valid.

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