The Law Reform Act 1945 and Breaches of Contract

Abstract

The almost complete judicial silence concerning the application of the Law Reform (Contributory Negligence) Act 1945 ('The 1945 Act') to breaches of contract has been broken in the last few years by a handful of cases. Whilst an attempt has been made at a systematic breakdown of the types of breach to which the 1945 Act should apply, it seems that it has not been completely accepted, and it is a pity that in the two most recent Court of Appeal cases on the subject Forsikringsaktiselskapet Vesta v Butcher' and Tennant Radiant Heat v Warrington District Council2 the House of Lords has not been called upon to consider the matter. There can be no doubt that the 1945 Act should apply in a contractual context at least to some extent, and that it does so. Given that the received view is that there is no common law defence of contributory negligence to a breach of contract,3 its application is necessary to avoid the iniquitous situation whereby a negligent plaintiff can avoid his partial liability by electing to sue in contract rather than in tort, reminiscent of Mrs Letang's attempt to circumvent the Limitation Act by suing in trespass rather than in negligence.4 On the other hand, the language of the 1945 Act does not lend itself to the view that the defence of contributory negligence is open to all breaches of contract; it calls for 'fault' on both sides,5 and so is unsuitable for non-negligent breaches of contract. Thus, two different situations arise, each calling for different applications of the 1945 Act: when the contract is breached in such a way as to render it tortious, it should be treated as such for the purposes of the 1945 Act; where, however, the breach has occurred without fault by the defendant, he cannot plead that the damages should be reduced by the plaintiff under the 1945 Act. This leads to the illogical situation whereby the greater the culpability of the contract-breaker, the less he may have to pay the party injured (albeit partly through this own fault): innocent breaches may cost the defendant dear, notwithstanding the plaintiff's own negligence. However, this is the only means of reconciling the wording of the 1945 Act with the situation, although a solution may be forthcoming from other branches of the rules as to damages.6 Hobhouse J, sitting at first instance in Vesta v Butcher,7 was the first English judge to lay down categories of case for the purpose of applying the 1945 Act to breaches of contract:8