02_Private_Law - Contracts 01 Private Law PART II THE PLACE...

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Contracts 01 – Private Law P ART II T HE P LACE OF C ONTRACT W ITHIN P RIVATE L AW I T HE L AW OF O BLIGATIONS A Doctrinal Intersection Private law deals with legal duties owed by individuals to one another. The law of contract exists alongside doctrines of: tort; o imposes duties to avoid certain kinds of conduct o liability Is fault based restitution; equity; and statute Contract obligations are self-imposed (voluntarily assumed), whereas obligations in tort, restitution, equity, and statute are externally imposed. 1 Contract and tort Contractual liability often exists alongside obligations in tort. For example: a breach of contract may involve the commission of a tort a false statement incorporated into a contract may attract liability in both contract (for breach of contract) and tort (for negligent misstatement) There are two situations where an action in tort will succeed but an action in contract will not: if the plaintiff is not a party to the contract, the doctrine of privity of contract prevents them from enforcing its obligations o however, in tort, obligations are owed generally to all parties, regardless of whether or not they are signatories to the contract where the assessment of damages is zero o contract law compensates ‘expectation loss’; it places the party in the position they would have occupied had the contract not been breached o consequently, if the party would not have been in any different a position had the contract not been breached, there is no recovery o tort aims to restore the party to the position they were in prior to the commission of the tort o consequently, though the wronged party may not suffer expectation loss, they may have been in a better position prior to the defendant’s tort Exam note: mention if a tort action could also apply, and not any differences in damages. 2 Contract and restitution Restitution is concerned with the imposition of obligations to restore unjust gains. It was originally based on the legal faction of an implied promise, and was known as a ‘quasi- contract’ (since it was based on the implied agreement to restore unjust gains). © Jaani Riordan 2004 Page 1 of 5 http://www.jaani.net/
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Contracts 01 – Private Law Doctrines of restitution were employed where the contract was unenforceable for whatever reason, but justice demanded the plaintiff receive a remedy. Today, the obligation is imposed simply to prevent unjust enrichment in certain defined circumstances ( ). Exam note: mention if restitution could apply. Facts Pavey agreed to perform building work for Paul Paul agreed to pay Pavey ‘reasonable remuneration for the work’ The agreement was not reduced to writing Upon completion, Pavey claimed to be entitled to $63 000 Paul only paid Pavey $36 000 Pavey sued for the remaining $23 000 Issue The contract was unenforceable by s 45 of the Builders Licensing Act 1971
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02_Private_Law - Contracts 01 Private Law PART II THE PLACE...

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