Difference between tort and breach of contract

Difference between Tort and Breach of Contract

Sometimes tort and breach of contract are found a little confusing since both of them entitle the affected party to claim legal damages. In this blog, we have differentiated between these two terms.

What is a tort?

The word “tort” has been derived from the Latin word “Tortum” which means to twist. It implies conduct that is not lawful and is rather twisted, crooked or unlawful. Thus, tort means a civil wrong. It is a violation of a legal right of a person or a breach of duty by one person towards another. For instance, the violation of a duty not to injure the reputation of someone else gives rise to a tort of defamation.

When a tort is committed, the injured party institutes civil proceedings against the wrongdoer and the main remedy for it is damages or compensation. In other words, the liability for a civil wrong arises in the form of unliquidated damages to be borne by the defendant (wrongdoer).

What is a breach of contract?

A contract is a legal arrangement that binds the parties to it. A breach of contract occurs when the parties fail to carry out their contractual responsibilities. The aim of forming a contract is to set out specific terms that the parties must fulfill, but when one of the parties fails to perform those obligations, it is referred to as a breach of contract. And the party who fails to meet his or her obligations is referred to as the breaching party.

It, therefore, becomes unreasonable for the other party if one of the parties has not complied with the terms of the agreement. As a contract is enforceable by law, the law has laid down some remedies to compensate the aggrieved party if there is a violation of the agreement.

Difference between Tort and Breach of Contract

We know that a tort is a civil wrong. But not every civil wrong is a tort. It has to be found out whether a civil wrong is a tort and not a breach of contract or a breach of trust. For example, if a person agrees to purchase an electronic set and thereafter does not fulfill his obligation to pay, the wrong is a mere breach of contract and not a tort.

The following points draw a clear line of distinction between tort and breach of contract:

1. Fixation of duties

Under tort law, the duties are majorly fixed by the law and a breach of these duties by the defendant constitutes a tort.

On the other hand, in the case of a contract, the duties of the parties are fixed by the parties themselves through the terms of the contract. A breach of such duties constitutes a breach of contract.

2. Duty with respect to whom

Under the law of torts, the duty is towards persons generally (the duty of not doing a civil wrong). Because a tort is a violation of a right in rem, i.e., against the world at large. For example, A’s duty not to trespass is not towards X or Y or Z only. Rather whosoever’s property is trespassed by A will be entitled to bring an action against him, depending upon the circumstances of the case.

In contrast, a breach of a contract indicates the violation of a right in personam, i.e., against some determinate person. Each party to a contract owes his or her duty only to the other contracting party. In other words, contracts are generally run based on the doctrine of privity of contract. As per this doctrine, only those who are a party to the contract can sue to enforce their rights and obligations under the contract. No third party to the contract, also called a stranger to the contract, can sue.

3. Motive

At the time of deciding a case under tort law, the motive of the defendant may be taken into account. If the motive is found to be good and a civil wrong has been committed in order to avoid some greater evil, the wrongdoer might escape the liability.

On the other hand, in the case of a breach of contract, the defaulting party is bound to bear the liability irrespective of his or her motive.

4. Nature of damages

The claim for damages under tort law is always for an unliquidated sum of money. Damages are the most important remedy under tort law and the term “unliquidated” means something which is not fixed or previously determined rather it is left to the discretion of the Courts.

Since usually the parties are not known to each other until the tort is committed, it is very difficult to visualize beforehand the amount of loss in a tort.

On the other hand, the damages in a breach of contract are usually liquidated. It means that they are either predetermined in the contract itself or are capable of being ascertained by applying some prescribed method.

Thus, when a contract is breached, the plaintiff is awarded such amount of damages that are either already settled between the contracting parties or that are capable of being determined from the relevant facts.

5. Parties

In tort law, the plaintiff and the defendant are generally not known to each other until the incidence of tortious liability. However, in the case of a breach of contract, the plaintiff and the defendant know each other from the very beginning, i.e., from the time of entering into the contract. Or else, sometimes contracts are also entered into between already known parties. They may know each other even before the contract between them is formed.

6. Other remedies

Apart from the right to damages, other remedies are also granted to the plaintiff under tort law. For example, the Courts may grant an “injunction” to the plaintiff to prevent a continuous nuisance. 

Similarly, where there is a breach of contract, a number of remedies are available to the aggrieved party. Some of these include recession of contract, suit for injunction, suit for specific performance, and Quantum Meruit. And needless to mention, the remedy for damages is also there.

7. Compensatory or exemplary damages

In the case of breach of contract, the nature of damages is compensatory. Whereas, the nature of damages in tort law can be compensatory or even exemplary. For example, in the popular case of Bhim Singh vs State of Jammu and Kashmir, the Court awarded exemplary damages of Rs. 50,000 to the plaintiff since the violation of his legal right to attend the Assembly session was owing to a mischievous and malicious act. 

8. Origin

In India, tort law is mostly based on English common law which is derived from judicial decisions. Thus, it has its origin as part of common law.

Whereas a breach of contract and its remedies are governed by the statutory law on contracts (The Indian Contract Act, 1872 and also the Specific Relief Act, 1963).

Similarities between Tort and Breach of Contract

Even though tort and breach of contract differ from one another, they also have some similarities. These are as follows:

1. Damages are the main remedy in both of them.

2. Sometimes it might be possible that the same wrong can give rise to a tort as well as a breach of contract.

Comparison Table (Tort vs Breach of Contract)

From the above points, the main differences between tort and breach of contract are as under:

BasisTortBreach of contract
Duty is fixed byLawParties themselves
Duty is with respect toAll persons generallyThe other contracting party
MotiveMay be taken into accountIs immaterial
Nature of damagesUnliquidatedLiquidated
PartiesDo not know each otherKnow each other
Examples of remedies other than damagesInjunctionThe recession of contract, suit for injunction, suit for specific performance, and Quantum Meruit
Compensatory/exemplary damagesCan be compensatory or exemplaryCompensatory
OriginCommon lawStatutes

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