Contract Law & Tort Flashcards
Formation of a contract
Offer - Acceptance - Consideration
Can I sub-contract ?
- Yes, but need written consent from the client.
- Regardless of any sub-contracting
by the Consultant, the Consultant will remain wholly responsible to the Client
for the proper performance of the Services by its sub-consultant. - PI to be notified.
what is a ‘tort’ law
It is a wrong in civil law (not criminal law).
Usually requires a payment of money to make up for damage that is caused.
A claim for negligence
Contract, tort or both?
As a professional, you are liable under contract law and tort law and your PI policy will potentially cover liability against both types of claim. In most cases the client will be alleging a breach of contract as well as negligence - they are often much the same thing because most contracts by which a professional agrees to provide a service contain an implied term that the professional will act with reasonable care and skill. This is the same standard as the duty of care which gives rise to a claim in negligence.
claims under contract law
If a client sues you for alleged breach of contract, the position is governed by section 5 of the Limitation Act 1980. The client has six years to bring the claim from when “the cause of action accrued” (meaning when the breach of contract was committed).
Claims under tort law
With claims for negligence under tort, matters are often more complicated. There is still a six-year limitation period, under section 2 of the Limitation Act 1980. However, this is only the primary limitation period. A secondary limitation period is introduced because in this situation the cause of action only accrues when the claimant sustains damage, which may or may not be the same date as the breach of duty.
For example, a firm of architects is commissioned to design a building. There’s a flaw in their design but the error it is only realised when fractures begin appearing in the building seven years later.
This is a situation where a claimant is completely unaware that something has gone wrong until after the primary limitation period has expired. To avoid this, a SECONDARY LIMITATION PERIOD has been introduced.
What is the secondary limitation period?
Section 14A of the Limitation Act 1980 covers this additional limitation period.
Having said all that, Section 14A cannot postpone limitation indefinitely: Section 14B of the act specifies a “longstop” of fifteen years from the act or omission in question.
Why is professional indemnity needed on a ‘claims made’ basis ?
Professional indemnity is designed as ‘claims made’ insurance. Therefore, the policy provides cover for claims made against you and notified to the insurer during the live policy period of insurance only.
Therefore, it’s critical to maintain a live policy at all times, even after retirement or the sale of a business.
Donoghue v Stevenson [1932]
Case determined under English tort (civil wrong).
Also known as the “Paisley Snail” or “Snail in the Bottle” case, the case involved Mrs May Donoghue drinking a bottle of ginger beer in a café in Paisley, Renfrewshire. Unknown to her or anybody else, a decomposed snail was in the bottle. She fell ill, and subsequently sued the ginger beer manufacturer, Mr Stevenson. The House of Lords held that the manufacturer owed a duty of care to her, which was breached because it was reasonably foreseeable that failure to ensure the product’s safety would lead to harm to consumers.
