Choice Of Law In Contract Matters—A Question Of Policy

DOIhttp://doi.org/10.1111/j.1468-2230.1974.tb02390.x
AuthorDerrick Wyatt
Date01 July 1974
Published date01 July 1974
CHOICE
OF
LAW
IN CONTRACT MATTERS-
A
QUESTION
OF
POLICY
THE
LAW
AND
POLICY,
IN
GENERAL
SEVERAL factors dictate the decision of an English court in a given
case. Statute
or
binding precedent may be decisive.’ And yet the
courts in interpreting and applying the law are often called upon
to analyse its underlying policy. In this country, such analysis is
usually covert. In
Donoghue
v.
Stevenson
the House
of
Lords
held that the law imposed a duty to take reasonable care to avoid
acts
or
omissions which one could reasonably foresee would be
likely
to
injure one’s neighbour. Lord Atkin recognised that such
a rule was one of extreme generality:
‘‘
The liability
for
negligence, whether you style it such
or
treat it as in other systems as a species of
culpa,’ is no doubt
based upon a general public sentiment of moral wrongdoing
for
which the offender must pay. But acts
or
omissions which
any moral code would censure cannot in a practical world be
treated
so
as to give a right to every person injured by them
to demand relief. In this way rules of law arise which limit
the range of complainants and the extent of their remedy.”
Such rules have indeed arisen, on the basis of principles
developed by the courts, but it is often difficult to apprehend the
precise criteria which the judges apply in defining the extent
of
negligence liability. They have often settled for a generalised
statement of their discretion in the matter.
As
Lord Wright put
it
in
Bourhill
v.
Young:
The general concept of reasonable foresight as the criterion
of
negligence
or
breach of duty (strict
or
otherwise) may be
criticised as too vague, but negligence is a fluid principle, which
has to be applied to the most diverse conditions and problems
of human life.
It
is a concrete, not an abstract, idea.
It
has to
be fitted
to
the facts
of
the particular case.”
*
This claim to exercise discretion in the matter is in reality a
refusal to rationalise,
or
subdivide, the rule. Such subdivision of
the rule would be made easier if the policy objectives of loss distri-
bution were articulated in greater detail. Other jurisdictions
are
not
SO
reticent in examining the criteria which affect the applica-
tion of un accepted rule,
or
even the continued existence
of
one
1
But
the
Hou~e
of
Lords mag depart from
its
own
previoiin
dwisiom,
CFP
[1%6]
3
All
E.R.
77.
2
‘19321
A.C.
562,
580.
3
19431
A.C.
92.
107.
399
400
THE
MODERN
LAW
REVIEW
VOL.
37
hitherto well established. In
Were
v.
Were,
Blandin
J.
was
faced
with a case in which three minor children were injured by their
father’s negligence in a car accident in which the father was killed.
Action was commenced against the father’s estate, and his insurance
company intervened to move for dismissal on the ground that the
law barred action by minor children against their parents. The
learned judge examined the grounds of policy on which the rule was
based, namely,
(1)
the preservation of parental authority and
family harmony,
(2)
the possibility of depletion of the family
exchequer, and
(3)
the danger of fraud and collusion. He took
note
of
the contemporary prevalence of insurance cover
for
motorists, and concluded
:
“. . .
we hold that the danger of fraud and collusion and of
depletion of the family exchequer, which were characterised
as
mere makeweights
and
insubstantial
considerations
in
Dunlap,“
have become, if anything, less substantial and less
weighty than when
Dunlap
was
decided in
1930.
They furnish
no sufficient grounds for denying unemancipated minors as a
class
a
right commonly enjoyed by other individuals.
. .
.
We
further believe that family peace and parental authority, in
the overwhelming majority of cases, will be threatened less by
an unemancipated minor’s suit for tort against a parent, where
the latter is generally protected from loss by insurance, than
by
an
action for breach of contract
. . .
where the parent would
ordinarily have to pay a verdict from his own pocket.”
In the development and interpretation of the law, the judges
turn to
principle.” This
principle
is to
be
deduced from the
circumstances of the creation
of
the rule, its previous application,
and the factual context in which it operates. Difficulties arise
if
the courts do not articulate the premises which guide their applica-
tion of the law. Where the premises of the various judges who
comprise the judiciary are unstated, large scope for diversity arises
through different judges viewing the policy of the law in different
ways. Difficulties may similarly arise where no coherent analysis
of the law is even undertaken. In the submission of the present
writer, such difficulties have arisen in the law relating to choice of
law in contract matters.
TIIE
POLICY
OBJECTIVES
UNDERLYING
CHOICE
OF
LAW
IN
CONTRACT
MATTERS
O
It
is suggested that a court faced with a choice of law problem in
contract is bound to consider some
or
all of the following factors.5
4
Dunlap
V.
Dunlap,
84
N.H.
952;
150
Atl.
905
(1930).
5 107
N.H.
432;
224
A.
2d
558
(1966).
The case
is
reproduced in part in
Gregory and Xalven
Cases
and
Materials
on
Torts,
2nd
ed.
(1970)
at
p.
713.
For quotation, see
p.
716.
For
examples
of
policy anelysis in English courtrr.
RBB
Launchbury v.
Morgans
[1971]
1
All
E.R.
642,
645,
646
(C.A.),
per
Lord
6,
7
For footnotes, see
p.
401.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT