PART II - THE PLACE OF CONTRACT WITHIN PRIVATE LAW

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 tor