Date: Sat, 17 Mar 2007 17:43

From: Jason Neyers

Subject: The Wayne Rooney case

Dear David:

Which cases stand for the proposition that one can breach a contract that it is voidable (and not affirmed), I thought that to avoid a contract one only had to act inconsistently with its terms (i.e. do something that would amount to a breach) not say "I am avoiding the contract".

I would think that a contracted for power of termination (where we might have agreed to a good faith limitation) would be different from the right to avoid (such that the proposition you cite is not on all fours (which case is it, by the way?)). Does anyone know of a case that stands for the proposition that one can only exercise their right to avoid a contract if they are acting in good faith?

If you are right on the other points, I don't see why you couldn't get damages to put you in the position you would have been in absent the wrong. For example, if the party with the right to avoid would never have avoided without the inducement there should be damages.

----- Original Message -----
From: David Wingfield
Date: Saturday, March 17, 2007 10:36 am
Subject: RE: ODG: The Wayne Rooney case
To: Jason Neyers, John Murphy

Dear John et al:

My initial reaction is that the judge was right but not for the reasons he gave.

The judge said that no tort of inducing breach of contract will lie where one of parties who is sued has the right to avoid the contract whether or not he has yet done so. Based on your summary it appears that the judge comes to this conclusion in one of two ways. Either he is saying that the tort doesn't lie because the contract couldn't be breached in this circumstance or he is saying that the right of avoidance is a defence to the tort of inducing the breach. Surely neither of these propositions can be correct. If the first is correct then it amounts to the proposition that a person who has the right to avoid a contract can never be held liable for its breach, which is not, to my understanding, Commonwealth law. In Ontario, for example, this proposition would run smack into the duty of a contracting party not to use his unilateral power of termination in bad faith. If the second is correct it creates a defence to an otherwise wrongful act without any explanation as to why there is or needs to be such a defence. The defence is, as John points out, an assertion not a reason.

Instead, I think that no tort of inducing breach of contract will lie where the contract is avoidable because in such a case there are no damages -- which the tort requires -- not because there was no breach of the contract or because the right of avoidance is a defence to the claim. If the person has the right to avoid the contract then the tort can never be complete since the parties to the contract can always avoid it and thus ensure that the plaintiff never has any damages from its breach.

--
Jason Neyers
January Term Director
Associate Professor of Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435

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