{"id":279,"date":"2010-05-09T09:39:28","date_gmt":"2010-05-09T16:39:28","guid":{"rendered":"http:\/\/fiduciarydutiesblog.com\/?p=279"},"modified":"2010-12-18T10:17:59","modified_gmt":"2010-12-18T10:17:59","slug":"fault-at-the-contract-tort-interface","status":"publish","type":"post","link":"https:\/\/fresnolawyerblog.com\/?p=279","title":{"rendered":"Fault at the Contract-Tort Interface"},"content":{"rendered":"<p>Prof. Roy Kreitner of Tel Aviv University shows great insight into  the dichotomy between tort and contract law.\u00a0 He first discusses how  tort law shifted toward a fault-based system during the nineteenth  century.<\/p>\n<p>States Prof Kreitner, \u201cthe early [tort] law asked simply, \u2018Did the  defendant do the physical act which damaged the plaintiff?\u2019\u00a0 T[ort] law  of today, except in certain cases based upon public policy, asks the  further question, \u2018Was the act blameworthy?\u2019\u201d<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.krbecheklaw.com\/wp-content\/uploads\/2010\/05\/Ft.-Ord-Public-Lands.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"Fresno Lawyers\" src=\"http:\/\/www.krbecheklaw.com\/wp-content\/uploads\/2010\/05\/Ft.-Ord-Public-Lands.jpg\" alt=\"Ft. Ord Public Lands\" width=\"500\" height=\"312\" \/><\/a><\/p>\n<p>Thus, \u201cthe ethical standard of reasonable conduct has replaced the  unmoral standard of acting at one\u2019s peril.\u00a0 It is most likely that  theories of strict liability were dominant during the formative years of  the common law.\u00a0 But during the nineteenth century . . . there was a  decided and express shift towards the theories of negligence.\u201d<\/p>\n<p>Prof Kreitner continues.\u00a0 \u201cThe accounts of such a shift are  persuasive, but only when one acknowledges that the shift took place  over the course of decades (rather than, say, through one key judgment  of an individual court) and that it solidified quite late in the  nineteenth century.\u201d<\/p>\n<p>Further, the shift in tort liability occurred among societal  changes.\u00a0 \u201cThe importance of the shift in background assumptions about  liability could hardly have been imagined early in the nineteenth  century, when the number of serious injuries from industrial activity  was minuscule in comparison to what would emerge in the last third of  the century.\u201d<\/p>\n<p>\u201cBy the last two decades of the nineteenth century, the question of  the extent to which injuries from industrial accidents could go  uncompensated had become a major economic battleground in ways that  would have been difficult to appreciate early in the century.\u201d<\/p>\n<p>Prof Kreitner then turns to contract liability.\u00a0 As he states,  \u201cEveryone is familiar with the idea that contract rests on a species of  strict liability, namely the claim that in general \u201cduties imposed by  contract are absolute . . . It remains an ingrained aspect of mainstream  understandings of contract.\u201d<\/p>\n<p>He explains that, \u201cWhat generally escapes appreciation is that the  understanding of contract as a strict liability regime is anything but  an age-old phenomenon.\u00a0 In fact, such a regime emerged in the United  States only at about the same time as the solidification of the  no-liability-without-fault regime in tort, during the final decades of  the nineteenth century.\u201d<\/p>\n<p>\u201cDuring the first half of the nineteenth century, although receding  slowly in the decades following, contract was understood as a  fault-based regime.\u201d\u00a0 The professor explains that fault was interposed  because contracts arose out of relationships.\u00a0 Contract law \u201cwas  understood in direct reference to the typical contractual relationships  that constituted it.\u00a0 This world of contract was inhabited by people in  relational pairs: bailor and bailee, principal and agent, master and  servant, principal and factor, landlord and tenant, vendor and  purchaser, husband and wife.\u201d<\/p>\n<p>Given these relationships, \u201cactors had standardized duties, whose  contours were shaped by the relation itself.\u00a0 Individual agreement  tailored these duties only on the margins.\u00a0 And while some of the  relations included duties we could characterize as absolute, it was far  more typical for duties to be framed in terms of reasonable skill,  reasonable diligence, or reasonable care.\u201d<\/p>\n<p style=\"text-align: center;\"><a href=\"http:\/\/www.krbecheklaw.com\/wp-content\/uploads\/2010\/05\/Guadalupe-Mountains-National-Park.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter\" title=\"Fresno attorneys\" src=\"http:\/\/www.krbecheklaw.com\/wp-content\/uploads\/2010\/05\/Guadalupe-Mountains-National-Park.jpg\" alt=\"Guadalupe Mountains National Park\" width=\"600\" height=\"450\" \/><\/a><\/p>\n<p style=\"text-align: left;\">Accordingly,  early contract liability was premised on fault.\u00a0 \u201cIt was a failure to  meet the standard of care, often phrased directly in terms of  negligence, that triggered contractual liability.\u00a0 Thus, the basic  standard of liability was one of fault, even if fault of an objective  variety.\u201d<\/p>\n<p>Societally-imposed standards were gradually removed from contract  law.\u00a0 \u201cIn order to exclude the state, the theory of contract had to  place the parties in full control of the relationship.\u00a0 Once that was  accomplished, the road was open for the parties\u2019 self-imposed obligation  to be construed as absolute.\u201d<\/p>\n<p>The shift was societal standards (i.e., liability based on fault) to  absolute liability has been complete in contract law for a century.\u00a0  \u201cContract was thus established as the very center of the private realm,  in part by purging its fault-based standards.\u00a0 Indeed, it is the image  of strict liability that heightens the sense of party control and  autonomy, since it is always assumed that the parties could, if they  wished, contract for any other standard of liability within their  contract.\u201d<\/p>\n<p>Yet, norms of conduct remain part of contract law, which is why  concepts of fault have not been eradicated from contract theory.\u00a0 \u201cPart  of what parties to a contract are involved in is the generation of a  public good [. ]\u00a0 This idea should not sound farfetched.\u00a0 It is  intuitive that contracting parties generate a public good in the shape  of trust in the market, or the idea of safe contracting.\u201d<\/p>\n<p>\u201cConsider, for example, the difference between analyses of  nondisclosure and misrepresentation: when dealing with silence regarding  features of the transaction . . . The analysis of misrepresentation is  fundamentally different, quintessentially fault based, and obviously  reliant on sources outside the parties\u2019 own agreement \u2013 and yet, no less  contractual for that.\u00a0 Nondisclosure can theoretically be overcome  simply by asking the right question.\u00a0 Misrepresentation, however,  threatens to unravel the basic background trust without which market  transactions would be far more difficult.\u201d<\/p>\n<p>(Roy Kreitner, <strong>Fault at the Contract-Tort Interface<\/strong>, in <em>Michigan  Law Review<\/em> (June 2009), Vol. 107, No. 8, p. 1533.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Prof. Roy Kreitner of Tel Aviv University shows great insight into the dichotomy between tort and contract law.\u00a0 He first discusses how tort law shifted toward a fault-based system during the nineteenth century. States Prof Kreitner, \u201cthe early [tort] law asked simply, \u2018Did the defendant do the physical act which damaged the plaintiff?\u2019\u00a0 T[ort] law [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,7],"tags":[],"class_list":["post-279","post","type-post","status-publish","format-standard","hentry","category-economics","category-law-reviews"],"_links":{"self":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/279"}],"collection":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=279"}],"version-history":[{"count":1,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/279\/revisions"}],"predecessor-version":[{"id":431,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/279\/revisions\/431"}],"wp:attachment":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}