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Summary Contract and Tort Law

Name: Contract and Tort Law
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Contract and Tort Law (RGPPR50205)

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Rijksuniversiteit Groningen (RuG)

Includes all necessary case law and Articles from the DCFR; each week is split into two parts [case law and legislation] to make it easier to follow since in the exam the questions are based solely on the DCFR or case law [not mixed application.] I got a grade 9 in the exam while using these notes ...

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Uploaded on July 5, 2020
Number of pages 41
Written in 2019/2020
Type Summary

private law 1
international and european law

Institution
Rijksuniversiteit Groningen (RuG)
Education
Internationaal en Europees Recht
Course
Contract and Tort Law (RGPPR50205)

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Private Law 1
Exam Notes 2020

,Week 1/2: Non-Contractual Liability
Legal Aspects of non-contractual Liability

1. Damage
2. Without any contractual relationship between victim and perpetrator

PART 1: LIABILITY FOR PERSONAL MISCONDUCT [Fault Liability]

Question 1: Duty of care?
 The duty of care question is a preliminary question which precedes the question of negligence

Question 2: Breach of the duty of care [fault]
 Once a duty of care has been established, it must be shown that a duty has been breached.
 Threshold of a ‘reasonable man’ in such circumstances

MANUFACTURERS DUTY OF CARE FOR DEFECTIVE PRODUCT

EN Case 1: Snail in a bottle: Donoghue v Stevenson [1932]

Facts:
 Mrs Donoghue went with friend to a café and friend buys her an ice cream over which the shopkeeper poured ginger beer
 A decomposed snail came from the bottle and Mrs Donoghue got sick
 There is a contract between the friend and the café but not Mrs D
 This is physical injury

Question of Law: Does the manufacturer of the ginger beer owe a duty of care to the ultimate consumer in these circumstances?

Judgement: The manufacturer of a defective product is liable in negligence to the consumer physically damaged by the product
because there is a duty of care.

Judges Argumentation:
 The Neighbourhood principle
 Duty of care to avoid acts or omissions where it is ‘reasonably foreseeable’ they would injure your
neighbour
 Foreseeable that a manufacturer that doesn’t take hygiene precautions will cause damage
 Liability for allot of people
-‘Reasonably foreseeable’ is broad
-One negligent act could make you liable to allot of people

DUTY OF CARE FOR MISTATEMENT IN DIRECT RELATIONSHIP

EN Case 3: Hedley Byrne v Heller [1963]

Facts:
 Hedley Byrne asked bank Heller to contact the bank of Easipower and ask if the company was healthy before contracting
with them
 Heller communicated directly to Hedley that everything was good
 Easipower went bust
 There is no contract between Hedley and Heller
 This is economic damage

Question of Law: Does Heller have a duty of care towards Hedley?

Judgment: The bank that gives false statements directly to a customer asking for information is liable in negligence for the
economic damage caused to the consumer because there is a duty of care.

Judges Argumentation
 The following four conditions must be proven to pass the Proximity test for misstatement
1. A legal relationship of trust and confidence between the parties [Special relationship]
2. The party preparing the advice/info has voluntarily assumed the risk [know it will be relied on]
3. There has been reliance of the advice/info from the other party and;

, 4. Such reliance was reasonable in the circumstances

DUTY OF CARE FOR MISTATEMENT IN INDIRECT RELATIONSHIP

EN Case 3: Inaccurate Audit: Caparo Industries v Dickman [1990]

Facts:
 Caparo Industries purchased shares in Fidelity in reliance of the accounts which stated that the company had made a
profit
 Fidelity had made a loss
 Caparo bought an action against the auditors, Dickman, claiming they were negligent in certifying the accounts
 No contract between Caparo and Dickman
 This is economic damage

Question of law: Does the auditor Dickman owe a duty of care to Caparo?

Judgement: Auditors which make inaccurate statements in their audit of a company’s accounts are under no duty of care towards
potential investors or existing shareholders who have suffered economic damage

Judges Argumentation:
 Misstatement will not pass proximity test when there is no special relationship;
-Statement is put into general circulation and may foreseeably be relied on by strangers for any purpose
 3-stage test for a duty of care was established in this case; known as the Caparo Test
(1) Was the damage reasonably foreseeable?
(2) Relationship of proximity between the parties
(3) Fair, just and reasonable to impose a duty of care

SOLICITORS DUTY OF CARE

EN Case 4: Will comes too late: White v Jones [1995]

Facts:
 Man quarrelled with his daughters and wrote them out of his will
 Man made up with daughters and wanted to write them back in
 The solicitor went on holiday and then missed lots of appointments and the man died
 There is no contract between solicitor and daughters

Question of Law: Does the solicitor have a duty of care towards the daughters [intended beneficiaries]?

Judgement:
 The solicitor is under a duty of care towards the intended beneficiaries of the will

Judge Argumentation:
 Lacuna in the law: such a duty must be recognised otherwise the person who has a valid claim [testator] has not suffered
damage and the one who has suffered damage [beneficiary] has no claim
 Application of Caparo Test
(1) Reasonably foreseeable that the intended beneficiaries would suffer damage
(2) That there was a relationship of ‘proximity’ or ‘neighbourhood’ between solicitor and beneficiaries
(3) Fair, just and reasonable to impose a duty of care
Evolution of the Case Law

Snail in a bottle Hedley V Byrne Inaccurate Audit Solicitors duty of care
Type of damage Physical Economic Economic Economic
 Duty of  Duty of care × No duty  Duty of care
care of care
Duty of care? Relationship of Relationship of No relationship of Relationship of proximity
proximity. proximity. proximity. between the solicitor and
You would need to Misstatement is given Misstatements of intended beneficiaries
have snails in every directly from bank to accountant are in
bottle for liability consumer. general circulation.
towards lots of
people

,DUTY OF CARE IN NEGLIGENT OMISSIONS

GR Case 5: Snow-Covered Steps

Facts:
 The plaintiff slips on snow covered steps
 Plaintiff sues the municipality because;
(1) Steps have not been maintained
(2) Not allot of light
(3) Increased risk because of the snow and municipality has not gritted the steps

Question of law: Is the municipality under a duty of care because steps are used by the public?

Judgement: The owner of a piece of land which is dedicated to public use is under a duty of care

Judges Argumentation:
 Public Safety
-Person who makes land available for use by the public has a duty of care to make sure it is safe for public use

GR Case 6: Lettuce Leaf

Facts:
 Plaintiff slipped on a lettuce leaf in a supermarket and sued the shopkeeper [owner]

Question of law: Is the shopkeeper under a duty of care?

Judgement: A shopkeeper has a duty of care to keep floor clean, but there is a reduction of liability by 1/3 because of the
contributory negligence of customer.

Judges Argumentation:

 Duty of care of the shopkeeper [long-term]
 To avoid liability shopkeeper must prove that shortly before the incident the area had been inspected and
nothing found
 Invoking ‘freshness of the leaf is not enough’
 Duty of care of the customer [short term]
 Depending on which part of the supermarket
-Take extra precaution in the fruit and vegetable aisle
-Take extra precaution at the checkout point
 Depending on the time/day
-Friday afternoon and very busy

DUTY OF CARE AND TORT BY THIRD PARTY [OMISSION]
 Liable in negligence for personal misconduct [omission] because you have a duty of care even though the third party
causes the tort

FR Case 7: Hooligans Harming Spectators

Facts:
 Individual dies during a football match when a hooligan spectator causes an explosion

Question of Law: Does the football club have a duty of care even though the tort was committed by a third party?

Judgement: The football club did not take adequate security measures [omission] which it has a duty of care to do and so it is
liable for physical/mental damage to relatives

Judges Argumentation:
 Duty of care to take adequate security measures [French law]
-Organizer of a sporting event is under a duty of care to take adequate security measures
- 33,000 spectators
-Strong indicators of violent incidents right from the beginning of the match

, -No inspection to prevent spectators from carrying objects which could cause injury
-Supporters of both teams were not seated at a safe distance from each other

NO GENERAL DUTY OF CARE TO PREVENT THIRD PARTIES FROM CAUSING HARM
-In English law there is no general duty of care to prevent third parties from causing harm but there are special circumstances

EN Case 8: Haynes v Hardwood [1935]

Facts:
 The defendant’s carter left the horse-drawn van unattended in a crowded street
 The horses bolted when a boy threw a stone at them [third party]
 A policeman got physically injured trying to control the situation

Question of Law: Does the owner of the horses have a duty of care towards the police officer?

Judgement: The owner of the horse is liable in negligence for the damage
 Special circumstances
(a) Source of danger
-The defendant must negligently cause to be created a source of danger
(b) Reasonable foreseeability
-Reasonably foreseeable that third parties may interfere with it and-sparking off that danger-cause damage to

EN Case 9: Vandals Setting Fire

Facts:
 Vandals break into the property of The Littlewoods and set it on fire
 The fire causes damage to the property of the neighbours, The Smiths

Question of law: Do the Littlewoods have a duty of care towards the Smiths?

Judgement: In the absence of special circumstances, there is not general duty of care for owners of the land to prevent
wrongdoing by a third party.

Judges Argumentation:
1. Haynes v Hardwood
-If you create a danger and that danger manifest then you are liable, this is not the case here
-It doesn’t matter if the event was reasonably foreseeable, because there was not a source of danger created as such [not
the same as leaving a horse in a crowded street]
2. No General Duty of Care on House Occupiers
-General duty of care on occupiers to prevent others from entering their property would be an unreasonable burden on
ordinary households

EN Case 10: Topp v London Country Bus

Facts:
 The defendants minibus was left overnight near a pub unlocked with the keys in the ignition
 Thieves stole the bus, knocked a woman off her bike and she died
 The husband bought an action for damages against the bus company

Question of law: Does the bus company have a duty of care towards the woman?

Judgement: In the absence of special circumstances, there is not general duty of care for owners of vehicles to prevent
wrongdoing by a third party.

Judges Argumentation:
1. Haynes v Hardwood
-If you create a danger and that danger manifest then you are liable, this is not the case here
-It doesn’t matter if the event was reasonably foreseeable because there was not a source of danger created as such [not
the same as leaving a horse in a crowded street]
2. No General Duty of Care on Vehicle Owners

, -General duty of care on vehicle owner to prevent others from stealing their vehicle would impose an unreasonable
burden

DUTY OF CARE OF POLICE: PUBLIC POLICY EXCEPTION

EN Case 11: Harassing Teacher: Osman

Facts:
 15-year-old Osman is harassed by teacher
 Despite several incidents he is not arrested
 He kills Osmans father and wounds Osman

Question of law: Is there a duty of care owed towards Osman and his father by the police?

Judgement:
 Caparo Test
1. ‘Reasonably foreseeable’ that by not arresting teacher harm would come to Osman/father
2. Osman has had several incidents with teacher so there is relationship of proximity between him and police
3. Public policy prevents duty of care upon the police it would not be ‘fair, just and reasonable’
=Police immunity

PART 2: LIABILITY WITHOUT PERSONAL MISCONDUCT [Strict Liability]

FR case 12: Hold-up by Convicts

Facts
 Prisoners have some liberty before they are set free
 They rob a bank
 The bank sues the Ministry of Justice [state]

Question of law: Is the state strictly liable to the bank?

Judgement: A decision of the state may give rise to liability when it created a special risk for the plaintiff

Judges Argumentation:
1. Following protocols [no fault]
-Decision of the Ministry of justice was in line with the protocols that guide releasing of prisoners
-It is in the interest of public to let prisoners get adjusted to life outside gradually before releasing them
2. The principle of ‘the equality of the citizens before the public burdens’
-Government may do things in the public interest but must compensate for these decisions if it creates a special risk for
the plaintiff

CLAIMING COMPENSATION FOR LOSS
1. Secondary losses
2. Privacy

SECONDARY LOSSES
- C is the secondary victim, there are 3 categories

A B C

CATEGORY 1: Breach of contract between A and B which means that C can claim damages for losses as a secondary victim

EN Case 1: Inaccurate Audit

Facts:
 Contract between Fidelity Inc and Dickman for Dickman to be the auditor of the accounts
 Dickman breached this contract [inaccurate audit]

,Question of law: Can shareholder [Caparo] claim loses as a secondary victim?

Judgement: Auditors which make inaccurate statements are under no duty of care towards shareholders so they cannot claim for
losses

EN Case 2: Will Comes too Late

Facts:
 Contract between man and solicitor for the solicitor to write up his will

Question of Law: Can intended beneficiaries claim losses as a secondary victim?

Judgement: A solicitor who prepares a will is under a duty of care towards the intended beneficiary of the will and so they can
claim for losses

CATEGORY 2: Tort committed by A towards B [human being] and C suffers loss and as a secondary victim claims damages
 A kills/injures B [human being] and C suffers
 Non-material damage [grief, psychological illness] or material damage [financial dependent or lost money]

PART 1: SITUATIONS OF GRIEF

FR Case 3: Claim by Concubine

Facts:
 A man in a car accident died
 The lover of the deceased man tried to claim damages for grief but they were not married

Question of Law: Is the unwed partner entitled to secondary losses for grief?

Judgement: Unmarried partners in French Tort law can claim material and non-material damages.

Judges Argumentation:
 The principle of legitimate interests in French Tort
-Not only rights [legal marriage/biological family] but all legitimate interests are protected under French tort law
-To claim secondary losses, you can be unmarried, an illegitimate child or even a friend if you can prove that ‘affection
for the victim is genuine’
(a) Sufficiently stable and continuous relationship
-The court does not focus on whether they are married [they can be adulterers] but weather their relationship is
‘sufficiently stable and continuous’
(b) Distinction between member of family and other persons
-Family benefit from a rebuttable presumption of affectionate relationship to the victim whereas other persons have to
prove

GR Case 4: Cancelled Cruise

Facts:
 Plaintiffs bought tickets for a cruise
 Son died in a car crash 5 days beforehand
 Plaintiffs tried to use grief suffered to recover the expenses of the non-reimbursable cruise
 They are not looking for a claim for third party compensation under 844-845 BGB
 They are claiming that their grief is an ‘injury to health’ under Section 823(1) BGB

Question of law: Are the parents entitled to secondary losses because grief qualifies as an ‘injury to health’ under German Law?

Judgement: Grief does not qualify as an ‘injury to health’.

Judges Argumentation:
 Limited Protection of Interests in German Tort Law
- Legislator wanted to restrict tortious liability under 823(1) and aimed in particular to restrict claims by third parties
[with exceptions of 844-845]

, (a) Mourning and grief qualify as negative experiences
-Mourning and grief are ‘negative experiences’ but are not for a legal point of view an ‘injury to health’
(b) Pathological harm= more than a negative experience
- Judges disallow claims for grief under 823(1) unless it becomes pathological

PART 2: SITUATIONS OF NERVOUS SHOCK
-This is not just psychological harm but a psychological illness

EN Case 5: Crush at Football Stadium

Facts:
 The Football stadium was already packed when police let in excessive amounts of additional spectators
 95 spectators were crushed to death

Question of Law: Do the police have a duty of care towards the secondary victims which allows them to claim compensation for
psychiatric illness [‘nervous shock’]?

Judgement: Injury caused by psychiatric illness [going beyond grief ] is actionable in tort at the suit of
 Primary victim: Psychiatric illness was reasonably foreseen
 Secondary victim: Only if psychiatric illness was reasonably foreseeable

Judges Argumentation
 ‘Foreseeability’ of psychiatric illnesss test
(a) Emotional proximity
-There needs to be a relationship between primary and secondary victim of ‘close ties of love and affection’
-Presumed in the case of spouses and between parents and children, but must be proven for others
(b) Physical and Temporal proximity to accident
-Physical=Seeing a loved one being crushed to death at the event
-Temporal= Includes seeing the immediate aftermath including scenes at hospital a few hours after
(c) Proximity of Perception
-Emphasis on whether you actually saw loved ones dying, on TV could not identify loved ones= Not Reasonably
foreseeable

CATEGORY 3:
 Tort committed by A towards B [an object] in which C suffers loss as a secondary victim
 A damages B [an object not owned by C] and C suffers losses as a result
 Material damage for C

PURE ECONOMIC LOSS OF SECONDARY VICTIMS

EN Case 6: Spartan Steel

Facts:
 While digging up a road the defendant negligently cut power cable to the plaintiffs factory
 The plaintiff sued for;
1. Physical damage to the melt in the furnace
2. Loss of profit on the melt that is thrown away as a result of the physical damage
3. Loss of profit on the four other melts that could have been carried out during power cut

Question of law: Does the defendant owe a duty of care for pure economic loss to a secondary victim?

Judgement:
 Physical damage to property
 Consequential economic loss resulting from physical damage to their property
× Pure economic loss independent of any physical damage to the property of the victim cannot be claimed

Judges Argumentation: The court gives several arguments for not allowing ‘pure economic loss’ of secondary victims for harm
to electricity cable
1. Healthy Attitude:
-Most people make up for the economic loss by doing more work the next day; this is a healthy attitude that law should
encourage
2. Time Frame

, -The supply is usually restored in just a few hours
3. Back-up plan
-If you know that your business is dependent on continuous power supply you should take precautionary measures:
insurance policy or stand-by system
4. Information Asymmetry
-Stimulate fraudulent claims: hard for the court to check how many melts you could actually make in this time
5. Loss Distribution
-Fairer that the economic loss is borne by the whole community than by one negligent person because it can affect so
many people

GR Case 7: Power Cable ‘Right to business’

Facts:
 Employee of a company damages a power cable that is running to another company

Question of Law: Can the victim company claim damages for pure economic loss as a secondary victim?

Judgement: There is no interference with the ‘right to business’ when there is loss of profit from electricity cut

Judges Argumentation:
 The ‘right to business’ in Germany is protected under 823(1)
 Limitations to the ‘right to business’ =Are the rights severable?
- Rights which can be severed from the business without difficulty
- Injury to an employee/damage to a lorry/damage to a power cable all affect any other business in the same circumstances
-The services of an employee/ use of a piece of property does not ‘characterise the substance of that business’

CLAIMING DAMAGE FOR PRIVACY
- No explicit recognition of a right to privacy in many countries, such as England
-Damages for violations of privacy can be claimed through other tortious acts

LENS 1: Medical Confidentiality=tort used for the protection of privacy

FR Case 8: Le Grand Secret

Facts:
 The French president died due to medical complications
 Afterwards, his personal doctor of 13 years wrote a book about the president’s illness

Question of law: Can the tort of medical secrecy can be used to award a right to privacy to secondary victims?

Judgement: Disclosing information covered by medical secrecy allows the family to claim for non-material damage and book
was banned.

Judges Argumentation:
1. Matters relating to the Personality and Private life
-Relatives ‘wounded in their deepest feelings as a result of this public disclosure of matter relating to both the personality
and the private life of their spouse and father’ [non-material damage.]
2. This was a relationship of trust
-President placed his trust in his doctor
3. Freedom of press is limited
- Freedom of the press and publication is limited in cases of abuse of that freedom by disclose of facts covered by
medical secrecy
4. Public Policy Interest [not actually mentioned in judgement]
- If doctors are not being secretive people will not seek medical treatment and will infect others

LENS 2: Malicious Falsehood=tort used for protection of privacy

EN Case 9: Interview in Hospital

Facts:
 Well-known TV personality and suffered a brain injury after a car accident

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