england

It is clear under English law that, with the possible exception of the variation where Richard sold Maria the plane, Richard is not liable in contract for failing to keep his promise to mail the documents. Richard may, however, be liable in tort, particularly if he is a professional.

A contractual claim would fail because Maria did not do or promise to do anything in exchange for Richard’s promise to mail the documents; that is, there was no consideration for Richard’s promise (see Case 1). Thus, in the similar English case of Argy Trading & Development v. Lapid Developments,43 a defendant was held not liable in contract for failing to fulfil his gratuitous promise to insure the plaintiff’s property. The only possible exception would be the case where Richard sold Maria the plane. Here it is possible that a court might hold that the promise to mail the documents was in substance all part of one sales transaction. As Treitel observes, ‘If the consideration and the promise are substantially one transaction, the exact order in which these events occur is not decisive.’44 A manufacturer’s guarantee, for example, may be binding even though it is often given after the goods are bought.45 However, as mailing insurance documents is not normally attendant to a sale of a plane in the same way that receiving a guarantee is attendant to purchasing goods, it is suggested that an English court is unlikely to reach this conclusion.

Maria may be able to recover in tort, particularly if Richard is a professional. The relevant law here is that discussed in my answer in the previous case. As we noted, it is both complex and in a state of flux. Any predictions made below must be approached cautiously. The non-receipt of insurance coverage or the payment of extra premiums is an economic loss, rather than a physical loss (such as the destruction of the plane, or physical injury to Maria), and, as noted in discussing Case 5, recovery for economic loss in tort is allowed in respect of the negligent provision of services. However, for a claim to succeed on this basis the plaintiff must establish that he or she had a ‘special relationship’ with the defendant. As discussed in connection with Case 5, the understanding of ‘special relationship’ is notoriously uncertain, but the most commonly cited tests ask whether the relationship was ‘close to contract’ or whether the defendant ‘assumed responsibility’ for the plaintiff’s economic welfare.46 Making a

46See, e.g., Lord Devlin’s judgment in Hedley Byrne v. Heller [1964] AC 465 and Lord Goff’s judgment in Henderson v. Merrett Syndicates Ltd [1995] 2 AC 145.

164 the enforceabilit y of promises

promise brings a relationship ‘close to contract’ and is also strong evidence of an assumption of responsibility.47 A further requirement for establishing the necessary special relationship is that the defendant be a professional (see previous answer). Thus, in the scenario where Richard is merely a friend he is unlikely to be liable in tort. But where Richard is a professional, whether in the insurance business, aircraft business, or in respect of delivering documents, tort liability seems possible (assuming that the promise was made seriously, and it was understood that it would be acted upon). Indeed, a close analogy exists in the late eighteenthcentury case of Wilkinson v. Coverdale,48 where a defendant was held liable for negligently failing to fulfil a gratuitous promise to insure the plaintiff’s property.49 Of course in no case would Richard be held liable unless he knew of the contents of the documents and of their importance; he cannot assume responsibility for that of which he is unaware.

Assuming, then, that a special relationship has been found, the case where tort liability is most likely is where Richard’s failure to mail the documents is due to his negligence, for example if he mailed the documents to the wrong address. More difficult is the case where Richard completely fails to act as opposed to where he acts but acts carelessly. As noted in the discussion of Case 5, in principle defendants are liable in tort law only for misfeasance (acting negligently), rather than nonfeasance (refusing to act). But we also noted that it seemed counter-intuitive that Richard could be liable for negligently failing to mail the documents but not liable for deliberately neglecting to mail them, and that various cases appeared to have ignored, or thought not relevant, the misfeasance/nonfeasance distinction here. In particular, in one case not dissimilar to the facts of Case 6, a solicitor was held liable in tort for failing in his promise to register an option, with no distinction being drawn between liability for misfeasance and nonfeasance.50 It is suggested that this approach would be followed by an English court on the facts of Case 6, rather than allowing the defendant to plead his own wilful wrongdoing as a defence. A court – or at least a trial court – would probably simply ignore the larger implications of the action. Or it might hold that Richard was negligent in failing to deliver the letter, even if the omission was intentional. The fact that Maria had actually handed over the documents to Richard would also, as explained in the discussion of Case 5, support liability. Note also that for the same

49The juristic basis of this decision may not be the same as that of more recent cases; see W. H. Rogers, Winfield & Jolowicz on Tort, 14th edn (1994), 106.

50Midland Bank v. Hett [1979] Ch. 384. See also White v. Jones [1993] 3 WLR 730.

reasons Richard would probably be held liable if he informs Maria that he will not deliver the letters, but does so only after Maria has detrimentally relied on his earlier promise. In both cases, however, the extent of liability would be Maria’s reliance losses (and thus would be less in the second case), as the source of the liability is the fact that Richard induced Maria to rely upon him.

ireland

In both Cases 6(a) and 6(b), it is clear that there has been no consideration provided by Maria nor was the promise made by way of a deed under seal. A promise to render a service without reward is not binding contractually as no consideration for it is provided by the promisee and thus Richard would not be liable in contract to Maria.51 However, although Richard’s promise does not create contractual relations between Maria and Richard, he could be liable to Maria in tort. In contract, liability is common both for misfeasance and nonfeasance. In tort, liability is normally imposed because of misfeasance, as liability for nonfeasance in tort requires a duty (usually based on some existing relationship) between the parties. Nonfeasance in the performance of a promise to render gratuitous services means failure to pursue a promised course of action while misfeasance means carelessness in the pursuit of that course of action leading to failure to achieve a promised result.52 In order to succeed in tort in an action for damages against Richard, Maria would have to show to an Irish court, inter alia, that a sufficient proximity existed between the wrongdoer and the person who had suffered damages, that the damage done was reasonably foreseeable, and that there was no compelling exemption based on public policy.53 The fact that the damage to Maria is purely economic is not in itself a bar to recovery in Ireland. The damage may be to ‘property, to the person, financial or economic’.54 Where Maria succeeded in an action in tort against Richard, the object of damages in such circumstances would be to compensate Maria by restoring her to the position which she would have held if the tort was not committed.

It might matter if Richard promised to help because he was a friend whose profession was completely unrelated to aircraft, insurance, or the mailing of documents. Again, there has been no consideration provided

51 See Argy Trading & Development Company Ltd v. Lapid Developments [1977] 1 WLR 444.

54See McShane Wholesale Fruit and Vegetables Ltd v. Johnston Haulage Co. Ltd & Carbrook Chemicals Ltd [1979] ILRM 86.