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Economic Torts Notes

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Economic Torts

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Intentional unlawful interference by the D with the economic interests of the P, such that the P suffers loss as a result. Have roots in common law, so differences in statute between jurisdictions are important (especially employment/union legislation) Many cases are interlocutory proceedings, making the judgments technically obiter. Concept of 'unlawful means' is tricksy, attention focused on this. The same facts might give rise both to accessory liability (inducing breach) and primary liability (unlawful interference). - Loktronic. e.g. A union might use the unlawful means of inducing a breach of employment k to pressure an employer into breaking a commercial k w a 3, the real target.

Inducing a breach of contract Tort of secondary liability. Lumley v Gye [1853] HL Opera singer (3) contracted to perform exclusively at P's theatre; D procured her to breach k and perform at D's theatre. D held liable tortiously for inducing a breach of k. Liable as an accessory to the 3's primary breach of the contract: Eale J: "procurement of the violation of a right" Elements

1. A legally enforceable contract in existence, which was breached. No secondary liability without primary liability; simply making performance more difficult/costly/make use of force majeure clause is not enough. (Lord Nicholls, Allan v Flood) No liability if contract is void as illegal/unenforceable/already terminated. No liability for an otherwise lawful act which prevents a contract's formation; probably not even if expectation in business dealings is for successive contracts. Path is now open for this to apply to inducement of violation of other rights, e.g. Breaches of confidence. Not litigated upo n yet.

2. D's conduct must have in fact induced a breach of k "Did the D's acts of encouragement/threat/persuasion etc have a sufficient causal connection with the breach by the 3 to attract accessory liability?" e.g. Pressure, persuasion, cajoling, seduction. Anything that causes breach of contract. But: Advice that simply warns 3s of future consequences of not breaching is not inducement; but depends on circumstances. Difficult line between warning/inducing: D will always claim to just have been warning; depends on D's credibility. Making contract more expensive or forcing the use of a force majuere clause not sufficient for liability.

3. D knows that their conduct would induce breach
- Knowledge Must know that conduct will cause a breach: Knowledge of existence of contract: Merkur(aware of ship's charter k, told tugboat not to pull it) Must subjectively realise effect of actions will be a k breach; test not whether reasonable to expect knowledge in circumstances - Ferguson Ferguson: D procured P's former employee to share trade secrets, honestly believing this would not breach the employee's conf identiality agreement. Recklessly/consciously deciding not to enquire = constructive knowledge, but negligent lack of knowledge is not enough. - Emerald Construction (EWCA) Need not know details of K, and probably sufficient if D knew it was likely some k existed: JT Stratford & Son v Lindley If know enough to suspect, but indifferent/reckless in not pursuing matter, constructive knowledge - Loktronic If honestly believe no breach of contract, then no liability attaches - e.g. D1 and D2, senior management for P (property manager) contract to take opportunities back to plaintiff. D3 offers joint venture - P sued D3, but D1+2 had told D3 there would be no breach, D3 believed on good faith, so not liable. Mainstream Properties v Young

4. The D intends to procure a breach
- Intention Must intend that actions will bring about breach of k (so must know about k). Intention is both necessary and sufficient: doesn't matter if inducing breach is a means to a further end, or not intended to cause damage. South Wales Miners' Federation v Glamorgan Coal - PC Oz - union intended to strike in order to drive up coal prices, profiting it and P, but this meant P breached its supply contracts. Good motive was no defence. Jiao v Barge (NZCA) said need motive harm/pressure the P; HL said motive not essential If breach of contract not an end in itself or a means to a further end, but merely a foreseeable consequence of action, insufficient intention. e.g. If breached contracts are a foreseeable by-product of actions, but not a means to an end or an end in itself, merely collateral damage, then no intention
 Miller v Bassey - held to be wrongly decided on this principle in OBG v Allan Where interference with a K is in one sense deliberate, but incidental to the D's purposes rather than the focus of activities; otherwise strikes always tortious. Where breach of P's k not merely foreseeable consequence of actions, but the only means by which D's actions could proceed, intention established - Loktronic. If breach of k simply a consequence of an earlier induced breach, not intended - Loktronic. Reluctance/lack of desire not relevant to intention - Loktronic

5. D's conduct in inducing the breach must have caused P loss/damage (or, if injunction, clearly foreseeable loss) Can recover for all intended damage, and all damage unintended but foreseeable and not too remote.

6. A defence of justification may arise in exceptional circumstances. Rarely pleaded successfully. Consider nature of k, position of parties to k, grounds for the breach, means employed to procure breach, relation of D to 3, and D's object in procuring breach.
- Glamorgan Coal Motive is irrelevant to intention, but relevant to justification: Pete's Towing Services. Insufficient: bad faith, no malicious intent, self-interest, disinterest, altruism, moral obligation, public interest, mistaken belief as to rights/duties. But policy may mean a moral obligation is sufficient: duty of doctor to give advice to patient (Friendly Society of Operative Stonemasons), inducing breach where wages forced women into prostitution (Brimelow), where inducement is to remove a violent person from a workplace (McIntyre) An equal or superior right may justify: e.g. Pre-existing contract, right under statute. Smithies: a pre-existing contract means that A can induce B to breach k with C, and can get a Court to make B breach it. Edwin Hill - cited by Lord Nicholls.

Unlawful interference(/causing loss by unlawful means) Tort of primary liability. Tarleton v M'Gawley (1794) D fired cannonballs at a canoe approaching P in order to trade, thereby preventing trading from taking place. D held liable for intentionally causing the P loss by unlawfully interfering with others' liberty. Elements - OBG v Allan

1. An intention to cause loss to the claimant. Study study Page 4

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