Law of Torts Project 2014 NLUO

8/11/2019 Law of Torts Project 2014 NLUO

1/15

EXPLAIN THE RECENT DEVELOPMENTS IN JUDICIAL APPROACH IN RESPECT OF TORT

AFFECTING PERSONS: THE TORTS RELATING TO INTERFERNCE OF CONTACT O

BUSINESS.

LAW OF TORTS

Submitted by:

AMAN RATHORE

14BBA008

Semester 1

AUGUST 2014


2/15

TABLE OF CONTENTS

TITLE PAGE

NO.

CERTIFICATE 2

ACKNOWLEDGMENT 4

LIST OF CASES 6

ABSTRACT 7

INTRODUCTION 8

1.1 NATURE AND DEFINITION TORTS

1.2 SOME DEFINATION OF TORT

2. TORT AND BREACH OF CONTRACT DISTINGUISHED

3. INTERFERNCE OF CONTACT OR BUSINESS

3.1 INDUCING AND BREACH OF CONTRACT

3.2 CONSPIRACY

3.4 MISREPRESENTATION

3.4.1. TYPE OF MISREPRESENTATION

CONCLUSION 14

BIBLIOGRAPHY

Statutes

Books

Websites

15


3/15

ACKNOWLEDGEMENT

I have endeavored to attempt this project. However, it would not have been feasible without th

valuable support and guidance ofDr.B.Hydervali. I would like to extend my sincere thanks to him.

I am also highly indebted to the library staff of the National Law University, Odisha, for their patie

co-operation as well as for providing necessary information & also for their support in completing th

project.

My thanks and appreciations also go to my classmates who gave their valuable insight and help i

developing this project.


4/15

TABLE OF CASES

1.

Birmelow V. Casson 9

2. Candler V. Crane, Christmas and Corp 13

3. Cann v. Wilson 12

4. Crofter Hand Woven Harris Tweed Co. Ltd. V. Veitch 11

5. D.C. Thomson & Co. Ltd v. Deakin 8

6. Derry v. Peek 12

7. Donoghue v. Stevenson 13

8.

Dr. Francesco V. Barnum 99. G.W.K. Ltd. V. Dunlop Rubber Co. Ltd 8

10.Genu Ganpati v. Bhalachand Jiraj 9

11.Headley Byrne and Co. Ltd. V. Heather and partner 13

12.Hunteley V. Thorton 11

13.Joe Lee Ltd. V. Dalmeny 9

14.Leliebre V. Gould 12

15.Lumley V. Gye 7

16.Mogul Steamship Co. v. Mcgregor, Gow and Co. 9

17.Quinn v. Leathem 11

18.Sorrel V. Smith 10


5/15

Critical examination of the torts interfering with Contract or Business

ABSTRACT

The following projects elaborate upon the torts that deal with interference of contract or business.

Firstly, the projects give a definition of Torts and the basic essential of it. Then in distinguished

between the tort and breach of duty after the basic terms are clear then the project deals with the torts

like inducement of Contract and how it is considered as a tort and by how inducement is done. Tort

dealing with conspiracy and how law to tort help to claim against them. The concept of

misrepresentation is also elaborated. Forms of misrepresentation alike innocent misrepresentation,negligent misrepresentation and fraudulent misrepresentations are also explained. These all concept

are explained through various cases.


6/15

1. INTRODUCTION

The project deals with the torts that are related to interference with contract or business. To understand

the topic we must know the very meaning of tort and what role it plays in the contract or business

1.1 NATURE AND DEFINITION TORTS

Derived from a Latin word tortum it includes that conduct which is not straight or lawful, but, on th

other hand, twisted, crooked or unlawful. The law imposes a duty to respect the legal right vested in th

members of the society and the person making a breach of that duty is said to have done the wrongful

act. As crime is a wrongful ac, which results from the breach of duty recognized by criminal law, a

breach of contract is the non-performance of a duty undertaken by a party to a contract; similarly,

tort is a breach of duty recognized under the law of torts.

1.2 SOME DEFINATION OF TORT

Some of the important definition, which indicates the nature of this branch of law, is as under:

1. Tort means a civil wrong which is not exclusively, a breach of contract or breach of trust-S.

2(m), the Limitation Act, 1963

2. it is a civil wrong for which, he remedy is a common law action for unliquidated damages and

which is not exclusively a breach of contract or breach of trust or other merely equitable

obligation- Salmond.

3. It is an infringement of a right in remof a private individual giving a right of compensation at

the suit of the injured party.- Fraser.

We may define tort as a civil wrong which is redressible by an action for unliquidated damages and

which is other than a mere breach of contract or breach of trust.

After understanding the concept of tort for the purpose of this project one must understand the concept

of contracts as well.

In a general view Contract law is that body of rules that govern contractual agreements between

persons or merchants. A contract is basically an agreement between parties outlining their duties and


7/15


8/15

and to sing for the defendant. The defendant was held liable.

The tort may be committed in various ways:

i) By direct inducement

the defendant must do the same either by offering some temptation, to one of the parties to make a

breach of his contract, for example, by offering higher remuneration to a servant than he is already

receiving under a subsisting contract or by giving some threat of harm if the contract is kept, alive.

Mere advice is not actionable. If a person breaks his contract of service because of medical advice, or

girl breaks her marriage on advice of her parents then no action can be brought against the doctor or th

parents for inducing breach of contract, it is, however, possible that the person making a breach of

contract of service or of marriage may himself be liable for the breach of contract.

ii) By doing some act which renders the performance physically impossible- examples of it are,

physically detaining one of the parties to the contract. RefD.C. Thomson & Co. Ltd v. Deakin2

removing the tools that is necessary to perform the contract, with a view to preventing the performanc

of the contract.

iii) Knowingly doing an act which if done by one of the parties to the contract, would result in breach of

the contract. The case of G.W.K. Ltd. V. Dunlop Rubber Co. Ltd3is a good illustration of this kind of

interference the company was a car manufacturing company which had entered into a contract with A

Co. that all the cars manufactured by the former were to be fitted by tires manufactured by latter

whenever the cars were sent to exhibition. When the cars were sent to an exhibition, Dunlop Rubber

Co. knowing about the above stated contract, secretly removed such tires from two of the cars and

replaced them with the tires of their own manufacture. The defendants (Dunlop Rubber Co.) were held

liable toward A. Co. for interference with the contract and towards plaintiff to trespass to the good.

The rule that inducement of breach of contract is a tort is subject to following qualification: -

1. Inducing the breach of subsisting contract is a tort, there is no wrong to persuade a person to refrain

from entering into a contract. It is also no tort to persuade a person to refrain from terminating an

existing contract lawfully. The authority for the proposition is the leading case ofAllen v. Flood4.

There the plaintiff who were shipwright, were employed by the ship owners to make repairs of wood

work on the ship. Their services were terminable at will. Due to some grievances some iron workers

2 (1952) 1 Ch. 646, at 678

3Idat 702

4(1898) A.C. 1.


9/15

objected to the plaintiff employment. There and through their representative, the defendant, they

conveyed to the ship owners warning that unless the plaintiff were discharged, they would go on strik

The plaintiffs were dismissed the very day. Since the services of the plaintiff were terminable lawfully

the House of Lords held that howsoever malicious motive the defendant may be having the plaintiff

had no cause of action.

The decision in Genu Ganpati v. Bhalachand Jiraj5, also explains this point.

2. Inducing breach of such agreement which is null and void is not actionable. Thus, no action lies to

induce the breach of a wagering agreement.6Or infants agreement which is oppressive and

unreasonable7.

3. An action lies when inducement to make a breach of contract is without any justification. Inducing

the breach with a justification is a good defense. Thus, inBirmelow V. Casson,8it was held that the

members of the action protection society were justified in inducing a theatre manager to break his

contract with a plaintiff, who paid his chorus girls such low wages that they were forced to resort to

prostitution. A father is also justified in persuading his daughter to make a breach of contract of

marriage with a scoundrel.

4. A statutory exception to the rule has been created by English (i) Trade Disputes Act, 1906.

According to Sec. 3 of the Act.

Anact done by a person in contemplation or furtherance of a trade dispute shall not be actionable on

the ground only that it induces some other person to break a contract of employment or that is in

interference with a trade, business or employment of some other person or with a right of some other

person to dispose of his capital or labor as his wills.

A similar provision has been made by the Sec. 18(1), The Indian Trade Union Act, 1926, which says

nosuit or other legal proceeding shall be maintainable against any registered trade union or any

officer or member thereof in respect of any act done in contemplation of furtherance of a trade dispute

to which a member of the trade union is a party on the ground only that such induces some other perso

to break a contact of employment, or that it is an interference with a trade, business or employment of

some other person or with right of some otherperson.

5 A.I.R. 1981 Bom, 170

6Joe Lee Ltd. V. Dalmeny (1927) 1 Ch. 3000

7Dr. Francesco V. Barnum (1890)

8(1924) 1 Ch 302


10/15


11/15

2. If the real purpose of the combination is not to injure another, but to put forward or defend the trade o

those who enter into it then no wrong is committed and no action will lie although damage to another

ensue.

The distinction between two classes of cases is sometime expressed by saying that in cases of the

former class there is not, while in cases of the latter class there is, just cause or excuse of the action

taken.

Crofter Hand Woven Harris Tweed Co. Ltd. V. Veitch12

is another illustration of a combination of a

lawful purpose. There, the defendant, a trade union, instructed Dockers who were members of the

union to refuse to handle the plaintiffs good (without there being any breach of contract). The object

this embargo was to prevent competition in the yarn trade and thus help to secure economic stability o

the industry and thereby increase the wage prospect of the union member in the mill. It was held that

since the above action by the union was to promote the interest of its member there was no conspiracy

If the purpose of the association is to injure the plaintiff rather than the promotion of the legitimate

interest, an action lies. InHunteley V. Thorton13

the plaintiff, members of the union refuse to comply

with the union call for strikec. The defendants, secretary and some members of the union, wanted the

expulsion of the plaintiff from the union, but the executive council of the union decided not to do that

The defendant acting out of grudge against the plaintiff made efforts to see that the plaintiff remained

out of work the defendant were liable as there acts, after the decision of the union executive council

were not in furtherance of any union interest but were actuate by malice and grudge.

In Quinn v. Leathem14

also, there was found to be malicious motive on the part of the defendant, certa

trade union officials. The plaintiff was a wholesale butcher and the defendant objected to his employin

the non-union labor. The defendant requested the plaintiff to replace the non-union labor with the

member of the union but the plaintiff refused to do that. Then the defendant approached one of the

plaintiffs regular and big customers with the threat to use of force against him if he continued to

purchase meat from the plaintiff. The customer stopped taking the meat from the plaintiff, who suffere

loss thereby. The plaintiff was held entitle to claim compensation from the defendants.

12(1942) A.C. 435

13(1957) 1 W.L.R. 321; (1957) AII E.R. 234

141907 A.C. 495


12/15

3.4 MISREPRESENTATION

A misrepresentation is a false statement of fact made by one party to another which, whilst not being a

term a contract, induces the other part to enter the contract. The effect of an actionable

misrepresentation is to make the contract voidable, giving the innocent party the right to rescind the

contract and/or claim damages.

3.4.1. TYPE OF MISREPRESENTATION

I. NEGLIGENT MISEREPRESENTATION

When the defendant has deliberately made a false statement and caused loss to the plaintiff, who relied

and acted on the statement, the defendant would be liable. The question now to be considered is, as to

how far the defendant would be liable for a statement honestly but negligently made by him, when suc

a statement causes some harm to the plaintiff.

In

II. Cann v. Wilson15

, an action for negligent misstatement was recognized and damages awarded. There,

the defendants, who were evaluators of property at that time, over valid certain property at that time

they knew that the property was being valued for the purpose of mortgage. On the strength of valuatio

the plaintiff granted loan to the owner of certain property. When the owners of the property defaulted

the repayment, the plaintiff found that the true value of property was not sufficient to satisfy the

mortgage debt. He wanted to recover the loss from the defendant. The defendants were held liable

because in these circumstances, they incurred a duty towards the plaintiff to use reasonable care in th

preparation of document.

InDerry v. Pee16

k,the House of Lords decided that there could be no liability for deceit in respect of a

negligent statement; it could be there only for a dishonest statement. This decision was subsequently

understood to mean that there could be no liability at all for a mere negligent misstatement; for the

purpose of liability, the statement must be deceitful. It is because of such interpretation in Leliebre V.

Gould17,the decision in Cann v. Wilson, was considered to be inconsistent with Derry V. Peek, and

deemed to be overruled thereby.

InLeliebre V. Gould, the plaintiff gives some loan the mortgage of certain property on a basis of a

15 (1888) 39 Ch D. 39

16(1889) 14 A.C. 337

17 (1893) 1 Q.B. 491


13/15

certificate given by the defendant, Gould. Gould who was the surveyor, had given this certificate to th

builder of the property, who had employed him. The plaintiff sued the defendant, Gould on the basis o

false certificate issued by him. It was held that there could be no action from mere negligence. An

action could sustain only if there was fraud. It was also observed that according to the decision in

DerryV. Peek, in the absence of the contract an action for negligence cannot be maintain when there

no fraud.

Liability for negligence was explained inDonoghue v. Stevenson,by the House of Lords after this

decision, it was argued in some cases that now the position had changed and there would be as much

liability for negligent words as for negligent deeds. This plea was rejected, and it was held that the

position remained the same. In spite of the decision inDonoghue V. Stevenson. In Candler V. Crane,

Christmas and Corp. It was stated that the ginger beer bottle case stated that duty of care only with

respect off dangerous chattels and that duty did not govern cases of negligent misstatement. Differen

rule still apply to the negligent statement and negligent circulation or repair of chattels; Donoghue ca

does not seem to have abolished such differences. It was also stated that false statement which were

made carelessly (rather than fraudulently by one person and acted upon by other to his disadvantage

could not be actionable unless there was a contractual or fiduciary relationship between both the

parties.

InHeadley Byrne and Co. Ltd. V. Heather and partner18

, the facts are as follow: the plaintiff, who we

advertising had been instructed by their customer, Easi Power Ltd., to obtain substantial advertising

contract for the latter. They were anxious to know the worthiness of Easi Power Ltd.; they requested

their own bankers to ascertain the financial position of easy power from the defendant, who were Easi

Powers bankers. On enquiry whether Easi Power were trust worth to the extent of 1, 00,000 pound pe

year. The defendant replied that the Easi Power were a respectably constituted company, considered

good for its ordinary business engagement. The letter also stated for your private use and without

responsibility from the part of this bank or its official. The plaintiff, replying on these statements wen

ahead with the contract made on behalf of Easi Power. The Co. went in liquidation and the plaintiff

suffered a loss of over 17,000 pound which they had spent on the order. The plaintiff sued the

defendant contending that the negligent misstatement made in this case amounted to a breach of duty.

Held, the defendants were not liable because they had been made protected themselves by stating that

the statement had been made without responsibility from the part of this bank or its official.

18(1964) A.C. 495, (1963) 2 A.E.R 575


14/15

The House of Lords clearly held that there was a duty to take care in making the statement and there

would be a breach of duty if the same were done negligently.

III. INNOCENT MISREPSENTATION

When a person makes a false statement but there is neither an intention to deceived nor any negligenc

in making the statement, there is no liability for such statement under law of tort because in such a cas

an action cannot lie either for fraud norfor negligent misrepresentation. In England, the

Misreprestation Act, 1967, however, permits the award of compensation for such innocent false

statement. The compensations under the Act are awarded when there is misrepresentation and parties

make a contract on that basis. That stipulates the right to claim compensation in case of non-fraudulen

misrepresentation in the same way as would have been there if there had been fraud...

IV.

FRADULENT MISREPSENTATIONLord Herschell defined fraudulent misrepresentation inDerry v Peekas a statement which is

made either:

i) knowing it to be false

ii) without belief in its truth, or

iii) recklessly, careless as to whether it is true or false.

The burden of proof lies on the claimant.

CONCLUSION

From the project, one will understand the basic difference between tort and breach of contact. After th

distinction it is easy to understand how torts can apply in contract as well that is its interference with

contact or business. The very purpose to this project is to explain the various torts that are concerned

with contract, like inducement of contract where a person induces other person to breach his/hercontract. Tort for conspiracy explain how a person for his own intention breaches another contract, an

then the projects also explains the concept of misrepresentation in and its various type which are

negligent misrepresentation, innocent misrepresentation and fraudulent misrepresentation where it has

been explained how a statement can be put up in various form and how a claim under tort can be mad


15/15

BIBLIOGRAPHY

1. Statues

Sec. 18(1), The Indian Trade Union Act, 1926

2. Books

Ratan Lal & Dhiraj Lal

R.K Bangia

3.

Website

indiakanoon.org

westlawindia.com

Law of Torts Project 2014 NLUO

Documents

Transcript of Law of Torts Project 2014 NLUO