Hello Prof Neyers,

 

I agree with the Supreme Court that a case of two-party intimidation (as opposed to one of three-party intimidation) is simply a contractual holdup, and, therefore, a breach of contract. Why should a breach of contract be treated as an economic tort when unaccompanied by exceptional factors (e.g. public interest concerns--as in the case of professional impropriety or misconduct by one’s lawyer)?  

 

The scenario presented is surely an interesting one and arouses sympathy for the victim in the issue who has lost an opportunity to earn $10,000. However, in my opinion, the case calls for a bit of rethinking of Hadley v Baxendale/ the remoteness rule in contract law. As I can glean from the facts presented, the parties had a one-off transaction, and as such, going by Hadley, the victim should have intimated the ‘intimidator’ of his exposure to economic losses should a breach arise. Notice to the intimidator concerning the victim’s business affairs would be a fair requirement in that situation. However, if the parties have had a course of dealing over time with both parties knowing each other’s business practices quite well—for example, that the victim is a businessperson—then the context of dealing should govern. In other words, the victim does not have to expressly or implicitly bring notice to the intimidator (i.e. the promisor) of his likely exposure to loss. If it would be apparent that the intimidator, at the time of (contemplating) breach, should have been aware that a breach would expose the victim to economic loss, then that should be enough to impose liability on the intimidator for the ensuing economic loss.

 

The remoteness rule should not be rigidly tied down to the requirement that a promisee must intimate the promisor of his exposure to loss. Such a requirement in ‘repeat contracting’ creates a risk of weakening the bargaining position of promisees, particularly as they have to disclose their affairs, and possibly trade secrets, to promisors. A course of dealing between the parties, if established, should be considered as a sufficient information resource available to the promisor to fix him with knowledge or awareness of his victim’s likely exposure to economic loss.

 

Regards

 

Moshood.

 

 

 

Dear Colleagues:

 

Assume that A and B have a contract for the rental of a venue for a wedding reception. Hours before the reception, B threatens to lock A out unless A makes an additional payment of $1500.  A makes the payment, but in so doing is rendered unable to invest in a valuable business opportunity that turns out to be wildly successful (ie losing a profit of $10,000).  Is there a way for A to recover the $10,000?

 

An action for duress would only led to a return of the $1500.

 

An action for breach of contract would seemingly fail as the contract was not actually breached (the venue was provided) and the anticipatory repudiation was not accepted by A (for good reason). Even if one could argue that there was a breach of some duty imposed by Bhasin v Hrynew it seems likely that the damages would run afoul of the Hadley v Baxendale remoteness rule.

 

A claim in 2-party intimidation would arguably fail, at least in Canada, since our Supreme Court has intimated that a threatened breach of contract is not unlawful means for the tort of intimidation. Instead the court stated that A should sue for breach of contract instead which would lead to no recovery (see above).

 

Does this seem right? If this is correct, and one thinks that there should be recovery, what is the means of recovery? I am leaning towards thinking that the SCC was wrong to suggest that breaches of contract can never be unlawful means for two-party intimidation, but am very interested in your thoughts.   

 

Sincerely,

 

 

 

Jason Neyers
Professor of Law
Faculty of Law
Western University
Law Building Rm 26
e. jneyers@uwo.ca
t. 519.661.2111 (x88435)