Criteria of Liability for Breach of Contract

Abstract

The Israel law on damages for breach of contract is contained in arts. 106–11 (112) of the Ottoman Code of Civil Procedure, 1879 (OCCP), and the law on damages for torts in the Civil Wrongs Ordinance, 1944, (CWO)— enactments from two different worlds, built upon different foundations. The tests of liability are as follows.OCCPart. 109. “If the non-performance of an agreement be not due to bad faith on the part of the person who has undertaken to perform it, the damages awarded against him shall be equivalent only to the direct and determinate loss suffered by the other party owing to such non-performance.”art. 110. “If the non-performance of the agreement be due to fraud or bad faith on the part of the person bound to perform it, he shall be liable to pay damages which shall include both direct loss caused to the other party by such non-performance and also profits of which he may have been deprived owing to such non-performance.”CWOsec. 60, prov. (a), “…where the plaintiff has suffered damage, compensation shall only be awarded in respect of such damage as would naturally arise in the usual course of things and which directly arose from the defendant's civil wrong;…”Among all the criteria of liability for damages (which will hereafter be analysed) one only is common to both laws—“direct” damage. But neither law is original; it will be more interesting, and more instructive for the elucidation of their meaning, to go back to the sources and to compare both sets of provisions with their source, and the sources with each other.