The Law of Obligations

Connections and Boundaries

Andrew Robertson

• Publisher: Routledge-Cavendish
• Year: 2012
• eBook ISBN: 9781135393489
• Edition: 1
• Topic: Law
• Subtopic: International Law
• Index: Law

This collection of essays makes an important contribution to debate about the structure underlying private law and the relationships between its different branches. The contributors, including leading private law scholars from Australia, England and Canada, provide valuable insights by looking beyond the traditional categories and accepted structure of the law of obligations.

This book covers three topics. The first is concerned with classification and the law of remedies. The chapters on this topic deal with both the classification of remedies themselves and with remedial issues that cross classificatory boundaries within the law of obligations. The chapters on the second topic reconsider some of the boundaries drawn by judges and scholars within the law of obligations. The third topic deals with the relationship between obligations and property.

The chapters in this book offer illuminating new perspectives on fundamental issues in the law of obligations. Together, they provide a thought-provoking reconsideration of connections and boundaries in private law.

1
CONNECTIONS AND BOUNDARIES IN PRIVATE LAW

Andrew Robertson^*

The chapters of this book are based on papers presented and discussed at a conference on The Law of Obligations: Connections and Boundaries held at the University of Melbourne in February 2002. The papers collected here develop the central themes of the conference; namely, the relationships between the various branches of private law and the analysis of issues crossing the boundaries between the traditional categories within the law of obligations.

The mapping of private law has long been a controversial exercise. The efforts of Patrick Atiyah and Grant Gilmore in the 1970s continue to attract hostile attention.¹ Patrick Atiyah proposed ‘some drastic redrawing of the lines’ within the law of obligations.² He suggested that ‘the new structure must … rest on the three basic pillars of the law of obligations, the idea of recompense for benefit, of protection of reasonable reliance, and of the voluntary creation and extinction of rights and liabilities’.³ Grant Gilmore argued that the enclave of contract law was gradually being swallowed up by the expanding empire of tort.⁴ Scholars in the United States are still bristling at the suggestions of Atiyah and Gilmore, even though it might now be argued that Gilmore’s prediction of a neo-classical reformulation of contract law has been realised.⁵ Gilmore suggested that in law, as in the arts, we may experience ‘alternating rhythms of classicism and romanticism’.⁶ Gilmore saw his own era of private law scholarship as one of romantic agony; an ecstatic time of improvisation and experimentation, in which everything was ‘confused, sprawling, formless and chaotic’.⁷ But he predicted the return to a classical period in which everything would again be ‘neat, tidy and

logical’ and ‘formal rules of structure’ would be stated.⁸ It may be, Gilmore said in 1974, that ‘some new Langdell is already waiting in the wings to summon us back to the paths of righteousness, discipline, order, and well-articulated theory’.⁹ In the United States, as Peter Linzer has pointed out, ‘we now know that the new Langdell, standing in the wings, was Gilmore’s then-colleague at the University of Chicago, Richard Posner’.¹⁰ For English legal scholars, the principal means of restoring or maintaining discipline and order in private law has been taxonomy, rather than economic analysis. In English private law scholarship, the metaphor of mapping has been used to express both romantic and classical inclinations.

Peter Birks and Andrew Burrows might be considered the chief English private law cartographers of the 1980s and 1990s. Their work clearly reflects ‘the classical aesthetic’ referred to by Gilmore.¹¹ Burrows has staunchly defended the division between contract, tort and restitution against the romantic experimentation of Atiyah.¹² Birks’ work has developed in response to the romantic chaos not only of Gilmore and Atiyah,¹³ but also of the legal realist and Critical Legal Studies movements.¹⁴ Birks has led the movement for a new taxonomy of private law.¹⁵ He has called for greater stability and consistency in the law and for the installation of ‘new mechanisms against intellectual disorder’.¹⁶ He has advocated the close mapping of the field of private law. Birks has himself promulgated a map derived from Justinian’s Institutes, which divides private law into four categories according to the events from which rights arise.
The essence of the Birksian scheme is that: ‘The rights which people bear, whether in personam or in rem, derive from the following events: wrongs, consent, unjust enrichment, and others.’¹⁷

In their very different ways, Gilmore, Atiyah, Birks and Burrows have encouraged private law scholars to pay greater attention to the relations between private law obligations. Their contributions have enriched private law scholarship by provoking vigorous debate about the structure of private law and the ways in which particular obligations can be understood. This book contributes to that debate by offering a range of perspectives on the law of obligations. The papers collected here are concerned with the interaction between different parts of private law and the insights to be gained from looking across the traditional boundaries. This collection is principally concerned with the study of connections

in private law: connections between contract, tort and restitution; connections between obligations and property rights; connections between obligations and remedies; connections between common law and equitable remedies. These chapters reconsider issues of classification in private law. They question the validity of the distinctions drawn between different branches of private law. They also explore some of the dangers that can arise from treating the boundaries within private law as fixed and impermeable.

This book covers three topics, and is organised accordingly. The first section is concerned with classification and the law of remedies. The chapters in this section deal with both the classification of remedies themselves and with remedial issues that cross classificatory boundaries within the law of obligations. The chapters in the second group reconsider some of the boundaries drawn by judges and scholars within the law of obligations. The third group deals with the relationship between obligations and property.

This classificatory scheme itself illustrates both the risks and the utility of taxonomy. It might be said, for instance, that the chapters do not fall neatly into the three categories. The categories overlap because they do not have the benefit of a common organising principle. It might be argued that a chapter put in one category would be better understood if placed in another. There may be illuminating connections between the chapters that are masked by the taxonomy that has been adopted. Similarities between approaches may be concealed. Differences of opinion might be overlooked. If the classificatory scheme breaks down it is because the subject matter of this book is too complex for an orderly, tripartite division. This does not mean that schemes for classifying complex subject matter serve no useful purpose, but only that their purpose is limited to offering an understanding of the subject matter. I am, of course, trying to make a broader point here about the utility of attempts to classify obligations and to map private law. If the law of obligations is too complex for orderly division, that does not mean that taxonomy is futile. The classification of private law obligations is a useful exercise, provided its goal is to aid understanding and contribute to debate, and not to devise a map that can be set in stone. The greatest achievement that can be hoped for in a new classificatory scheme or a radical redrawing of boundaries is to provide the starting point for a new discussion.

REMEDIES ACROSS THE BOUNDARIES

Chapter 2-4 deal with both the classification of remedies and with remedial issues that cross classificatory boundaries within the law of obligations. In Chapter 2, Michael Tilbury argues that the system of classification proposed by Peter Birks places too much emphasis on primary obligations at the expense of remedies.¹⁸ Central to Birks’ taxonomic scheme is a monist approach to the relationship between obligations and remedies. The monist approach is based on the idea of direct correspondence between obligation and remedy and the notion that remedies should simply mirror primary obligations. On this view remedial

discretion is illegitimate. Tilbury argues that the monist approach is unsustainable. Some remedies, such as exemplary damages and reliance damages in contract, clearly do not simply reflect the primary obligation that has been breached. Remedies do not flow mechanically from obligations. Judges are required to make value judgments and policy choices and to balance a range of factors in determining the appropriate remedial response to a broken obligation.

Tilbury warns of two negative consequences of the monist approach to remedies. The first is that, by treating the remedy as a mirror of the obligation, the monist approach obscures the useful insights that remedies can provide in understanding the structure of the law of obligations. Although remedial issues do not line up precisely with liability issues, a consideration of remedies does provide a check on the way in which matters relating to liability might lead us to understand and classify obligations.¹⁹ Tilbury’s second concern is that the monist approach tends to oversimplify the law of remedies. Tilbury cites the proposals made by James Edelman in Chapter 3 of this volume as an example of this destabilising tendency. Edelman argues that all monetary awards for wrongs should be labelled as damages and we should move towards a greater consistency between the common law and equity by treating like damages awards alike.
Tilbury suggests that symmetry between the common law and equity in relation to damages could only be achieved at the cost of an optimal fit between obligation and remedy. Approaches to causation and remoteness properly differ both between and within the common law and equity, according to the nature of the underlying obligation.

In Chapter 3 of this book, James Edelman develops his argument that the word ‘damages’ describes the monetary response to a wrong, and should not be understood as synonymous with ‘compensation’.²⁰ There are, Edelman argues, several legitimate, non-compensatory measures of damages; namely, nominal, exemplary, restitutionary and disgorgement damages. The legitimacy of exemplary damages is a particularly interesting issue because it raises the question whether punishment is an appropriate goal of the law of obligations.
This, in turn, forces us to consider the relationship between the law of obligations and the criminal law. As Edelman points out, the High Court of Australia has rejected the idea that there is a ‘sharp cleavage between criminal law on the one hand and the law of torts and contract on the other’.²¹ In the first part of his chapter Edelman argues that not only are awards of exemplary and gain-based

damages well supported by authority, but they are necessary for adequate protection of plaintiffs’ interests.

The second part of Edelman’s chapter focuses on the relationship between monetary awards at common law and their equivalents in equity. We should, Edelman argues, regard compensatory, disgorging and restitutionary awards made in response to equitable wrongs as damages, and should recognise the availability of exemplary damages to punish those who commit equitable wrongs. If we were to view each of these forms of equitable damages alongside their common law counterparts, this would foster the development of consistent principles relating to causation and remoteness. Edelman’s response to the concerns expressed by Michael Tilbury in Chapter 2 is that adopting the nomenclature of damages does not obscure the differences of substance between the common la...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• ACKNOWLEDGMENTS
• LIST OF CONTRIBUTORS
• 1: CONNECTIONS AND BOUNDARIES IN PRIVATE LAW
• 2: REMEDIES AND THE CLASSIFICATION OF OBLIGATIONS
• 3: THE MEANING OF ‘DAMAGES’: COMMON LAW AND EQUITY
• 4: RESCISSION, RESTITUTION AND CONTRACTUAL ORDERING: THE ROLE OF PLAINTIFF ELECTION
• 5: ‘UNJUST ENRICHMENT’: THE SAME OLD MISTAKE?
• 6: ON THE DISTINCTION BETWEEN CONTRACT AND TORT
• 7: THE ‘OTHER’ CATEGORY IN THE CLASSIFICATION OF OBLIGATIONS
• 8: INTEGRATING PROPERTY AND OBLIGATIONS
• 9: OWNING SECRETS: ‘PROPERTY’ IN CONFIDENTIAL INFORMATION?
• 10: CONTRACT RIGHTS AS PROPERTY RIGHTS