The Concurrent Liability in Contract and Tort Under U.S. and English Law: To What Extent Plaintiff Is Entitled to Recover for Damages Under Tort Claim?

Both U.S. and English courts has confronted with the concurrent situations mostly occurring in the cases where 1) the plaintiff asks for the recovery in tort claim despite the existence of contractual relationship or 2) the plaintiff asserts contract claim but the defendant contends that the issue at bar should be sound in tort rather than in contract. After studying all relevant cases and academic writings, this thesis found that both U.S. and English systems generally recognize concurrent tort claim as an elective right. The courts have attempted to provide the justified rationales either to allow the plaintiffs tort claim or to apply tort rules according to the defendant\u27s defense. All rationales given is definitely aimed at significant aspects including the protection of parties\u27 expectation, the creation of justice, and the reinforcement of public policy. However, there are also the restrictions on the permissive rule of concurrent claim. The critical limitations on the rights to tort claim are as follows: Firstly, because both U.S. and English courts generally recognized that the recovery for economic loss is limited only in contract claim, plaintiffs\u27 rights to tort claim for pure economic loss is limited. U.S. law recognized plaintiffs tort claim for economic loss only in the cases of professional negligence and of bad faith breach of contract. However, some courts are attempting to develop and apply the independent duty doctrine to permit more tort claims of negligence especially for economic loss. Furthermore, tort liability for bad faith breach of contract is mainly limited only in the relationship in insurance contract. To prevent an opportunistic breach of contract, this thesis suggests that the concept of bad faith breach should not be limited only in an insurance contract. Similarly, English law invokes the principle of assumption of responsibility that requires the special relationship between the parties in order to grant the award to the plaintiff who assert concurrent claim of negligence for economic loss. Secondly, it is clear that under English law, the tortious duty of care can be excluded or limited by the exculpatory clause or contractual term of liquidated damages. While English courts refuse to impose the duty of care, which is inconsistent with what the parties have agreed in their contract, it is not apparent that U.S. courts entirely refuse to impose tortious duty of care, which is inconsistent with what the parties have voluntarily agreed in their contract. As to this approach of English system, this thesis suggests that it would be fair, just and reasonable if U.S. courts apparently adopt and apply this kind of limitation to restrict concurrent tort claim in U.S. jurisdictions in order to sustain the freedom of contract doctrine which has the dominant aim to protect the contracting parties\u27 bargain of interest in allocation of their particular risk in the particular way so far as their interest is not outweighed by the mandatory law or public policy. Thirdly, it is suggested by scholars\u27 views that the doctrine of efficient breach recognized in U.S. contract law should be taken into account in limiting the imposition of tort liability on the breaching party particularly in commercial transaction if breaching party can prove that nonperformance is economically efficient. This thesis agrees with this suggestion because this would neither lead to the destruction of well-established concept of efficient breach nor bring about the unreasonable consequences that cause harm to the public economic interest. Lastly, some English courts is inclined to limit the scope of recoverable damages in concurrent tort claim by applying the similar test of remoteness of the breach of contract claim to the tort claim. This restrictive approach aims at the protection of the parties\u27 expectation interest rather than deterrence the wrongful conduct. As for such reason, this thesis suggests that the limitation on the scope of recoverable damages is justifiable only in the case where the tortious duty being imposed by virtue of a contract rather than being imposed by the virtue of provision under a statute or existing independently of contractual terms