Date: Thu, 10 Feb 2005 13:04:34

From: Robert Stevens

Subject: Remoteness

Thanks for the excellent article which probably kills off any vague thoughts I had about writing something on remoteness. A few thoughts off the cuff.

1. If the rule in contract really does rest on tacit agreement or assumption of responsibility, it should come as no surprise that the rule in the tort of negligence is rather different as it must (usually) have a different underlying rationale. I have no agreement with someone who runs me over as I cross the street.

2. That we ask what was in the reasonable contemplation of the parties at the time of contracting (rather than say breach) might be said to support the tacit agreement thesis, but the other arguments I gave (which could be characterised as based upon economic efficiency) would also support answering the question at the time of contracting.

3. As an explanation of the exclusionary rule the 'tacit agreement' account has attractions How can a defendant be said to be assuming responsibility for losses he knows nothing about? However, as you acknowledge in you piece, H v B doesn't seem to go far enough. The claimant is not required to show that the defendant is tacitly assuming responsibility for the loss he has suffered according to orthodoxy (Heron II). In Jackson v Chrysler Acceptances Ltd [1978] RTR 474 CA the claimant buyer of a car informed the car dealer that he was planning to use the car for a holiday in France. The holiday was spoiled because the car broke down. The claimant successfully claimed for the spoilt holiday. Whilst the spoilt holiday was within the reasonable contemplation of the parties, I find it difficult to accept that the defendant was assuming responsibility for the holiday. Perhaps this case is wrong? (cf Kemp v Intasun (1988) 6 Tr L 161).

4. Why is the assumption of responsibility dependent upon foreseeability? If I promise today to deliver to you 100 widgets tomorrow I am in breach, and liable for damages if I fail to deliver tomorrow. It does not matter that my inability to deliver is caused by an event which was wholly unforeseeable by me. Only if performance is rendered impossible by a frustrating event will I be excused. If the issue of liability is not determined by foreseeability, why should the question of whether I have assumed responsibility for particular loss flowing from breach?

5. If you are right, the probability with which the loss must be foreseen does become meaningless, as you say. However the HL in Heron II did try to answer the question of the degree of foresight required.

6. If the contractual obligation is one to take care, the remoteness rule could perhaps be explained as based upon the fault principle (cf WM no 1). In those jurisdictions (France??) where breach is (generally) more frequently seen as dependent upon fault perhaps the rule requiring that the loss is reasonably contemplated makes more sense.

7. In so far as I have an interesting thought, this is it. Where there is concurrent liability in contract and tort, should we apply the contract test or tort test? Say in Doughty v Turner [1964] 1 QB 518 the possibility of the violent chemical reaction was wholly unforeseeable at the time of contracting but is discovered before the time of the accident. Could the defendant escape liability by saying the loss was outside the parties contemplation at the time of contracting? Surely not, it was reasonably foreseeable at the time of breach (negligence). Where liability is independent of the defendant having promised the claimant anything, the more generous tort test should be applied.

8. Where liability is dependent upon an assumption of responsibility (i.e. a promise) the contract test should apply regardless of whether the claim is contractual (Brown v KMR).

9. I agree with Jason that the reason Lord Reid gives in Heron II doesn't justify different tests in contract and tort. Whether the claimant had the opportunity to warn the defendant of any particular loss he might suffer can be taken into account in deciding what is reasonably foreseeable. ("I assumed you would tell me about any peculiarly lucrative contract") The fact of the opportunity to warn can be taken into account in applying reasonableness.

bw
RS

----- Original Message -----
From: Adam Kramer
Sent: Thursday, February 10, 2005 9:49 AM
Subject: RE: ODG: Remoteness

Dear all,

I too am a Pothier man (and he took it from Molinaeus). It seems to me to all rest on implied agreement, the old British Columbia and Vancouver’s Island Spar, Lumber, and Saw-Mill Co. v Nettleship (1868), L.R. 3 C.P. 499 view with a few glosses. Despite a fashionable skepticism about implying things (that I think is misguided as it stems from failure to recognise that we can, in a real sense, intend things that never crossed our minds), we have become quite sophisticated at interpreting contracts, so why don't we use those skills to work out what scope of responsibility has been impliedly accepted? For me it depends upon lots of (shared) knowledge and assumptions about how standardised the product/service was, the factors that are likely to have gone into pricing (such as insurance), and a bunch of other factors. They must be shared, so such factors will necessarily be vague as most parties don't know much about other parties' business.

Bizarre questions like 'must it be foreseeable as not unlikely or as a serious possibility' are meaningless as all depends upon how the 'it' is defined (a point almost made in the Jackson case), and the real question depends upon what one would normally assume about the scope of the duty undertaken. Anyway, I investigate and put these views in a piece that is published now or very soon: 'An Agreement-Centred Approach to Remoteness and Contract Damages' in N. Cohen and E. McKendrick, Comparative Remedies for Breach of Contract (Oxford: Hart, 2005). The piece is also at http://www.kramer.me.uk/adam/research.htm.

<<<< Previous Message  ~  Index  ~  Next Message >>>>>