Date: Tue, 8 Apr 2008 16:26

From: John Swan

Subject: Contract, Consideration and Tort Duties

Robert,

Isn't the more interesting problem that of the measure of damages. Suppose that a client goes to a solicitor to have her act in the client's purchase of property. The solicitor does her job badly and, as a result, the client gets less land than he expected — we can assume that the vendor thought it owned more land than it really did and the solicitor failed to discover this fact.

Suppose, to take the exact facts of an Ontario case, the land, i.e., the smaller parcel that the vendor actually owned and which the client bought, is worth what the client paid. Assume also, though this fact was not proved in the Ontario case, that had the client got all the land that he thought he was buying, he could have sold it for a profit of, say, $100,000.

What is the correct measure of damages?

A tort approach might suggest that the damages are zero (and that’s what the court held); what would a contract approach suggest? It seems to me that the question is not tort or contract simpliciter but the nature of the solicitor’s promise. Did she promise that, if the client used her services, he would not suffer a loss or did she promise that, if the client used her services, he would make what he would have made, had he got what he expected to get? Since the contract will have been made in a conversation which, stripped to its essentials, probably takes the form: “Will you act for me in the transaction?” “Yes”. There is, of course, consideration for either promise in the fee paid to the solicitor.

If the damages are determined to be zero, we can infer that the court thought — though whether it actually thought about the problem in the terms I have stated is another matter altogether — that the solicitor made what I can call the lesser promise. In this case, it does not matter whether the client sues in contract or tort. Only if one sues in contract and only if the court infers that the solicitor made the greater promise, do the damages for breach of contract approach the “ordinary” contract measure.

Canadian cases on this point are not consistent. A naval architect has been held to have made the greater promise; solicitors have generally been held to have made the lesser promise though in some cases the damages are the same regardless of the undertaking made or inferred. (This result typically occurs when land is sold as an investment and not for speculation.)

In the dentist case a question might be whether the dentist simply promises to relieve the pain or, in the case of the greater promise, to give her patient the pleasure and satisfaction of a bright, white smile. It does not seem to me to be too clear for argument that there are not (at least) two possible promises.

I think that, at least in the case of professionals, the possible existence of alternative promises is more important than whether there is or is not concurrent liability since it seems now to be well established that such concurrent liability exists.

An interesting parallel is the case of Esso v. Mardon. While Lord Denning M.R. says he’s giving tort damages, if you do the calculations carefully, it is not at all clear that he is not in fact awarding contract (warranty) damages, i.e., at the expectation level and what the defendant would have got had the plaintiff made a promise of the gas station’s — sorry, petrol station’s — potential profitability.

John

 -----Original Message-----
From: Robert Stevens  
Sent: April 8, 2008 3:09 AM
To: Jason Neyers
Subject: Re: ODG: Contract, Consideration and Tort Duties

(i) I don't think a promise not to defame/not to lock up/not to punch on the nose is capable, without more, of being good consideration. Such a promise confers no benefit upon the promisee other than that which he would have had anyway. Denning's obiter dicta to the contrary seem to me to be wrong.

It might be the case that if the promisor would have defamed/locked up/punched the promisee if the promise had not been given, that a Williams v Roffey-ish 'practical benefit' is thereby conferred upon the promisee, and that this ought to suffice as consideration. In that case we find ourselves in the realm of duress. However, in Professor Stapleton's hypo, the injury occurs and so this analysis won't assist.

(ii) There plainly is consideration provided by the dentist as he is undertaking to do the work. [Query are dentists a common calling? I know surgeons (along with others such as innkeepers and common carriers) are. Are dentists surgeons for these purposes? The problems I have had getting a dentist would indicate no.]

(iii) Professor Stapleton presumes that the dentist's promissory obligations are severable. So the dentist would be separately promising (a) to undertake the work and (b) not to carelessly or deliberately injure the patient whilst carrying it out.

If the promise was severable, then there would be no consideration provided for promise (b) anymore than there would be in case (i).

The presumption is wrong. The dentist is simply undertaking to carry out the work carefully. That this the more natural interpretation of what has been undertaken is correct may be tested by considering what the position would be if he negligently broke the patient's jaw in carrying out the work. Could he still claim his fee? I rather doubt it.

So, as we all seem to be agreed, there is concurrent liability in this case.

Happily this conclusion coincides with the law.

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