A more practical advantage in looking at a contract as the taking
of a risk is to be found in the light which it throws upon the
measure of damages. If a breach of contract were regarded in the
same light as a tort, it would seem that if, in the course of
performance of the contract the promisor should be notified of
any particular consequence which would result from its not being
performed, he should be held liable for that consequence in the
event of non-performance. Such a suggestion has been made. /1/
But it has not been accepted as the law. On the contrary,
according to the opinion of a very able judge, which seems to be
generally followed, notice, even at the time of making the
contract, of special circumstances out of which special damages
would arise in case of breach, is not sufficient unless the
assumption of that risk is to be taken as having fairly entered
into the contract. /2/ If a carrier should undertake to carry the
machinery of a saw-mill from Liverpool to Vancouver's Island, and
should fail [302] to do so, he probably would not be held liable
for the rate of hire of such machinery during the necessary
delay, although he might know that it could not be replaced
without sending to England, unless he was fairly understood to
accept "the contract with the special condition attached to it."
/1/
It is true that, when people make contracts, they usually
contemplate the performance rather than the breach. The express
language used does not generally go further than to define what
will happen if the contract is fulfilled. A statutory requirement
of a memorandum in writing would be satisfied by a written
statement of the promise as made, because to require more would
be to run counter to the ordinary habits of mankind, as well as
because the statement that the effect of a contract is the
assumption of the risk of a future event does not mean that there
is a second subsidiary promise to assume that risk, but that the
assumption follows as a consequence directly enforced by the law,
without the promisor's co-operation. So parol evidence would be
admissible, no doubt, to enlarge or diminish the extent of the
liability assumed for nonperformance, where it would be
inadmissible to affect the scope of the promise.
But these concessions do not affect the view here taken. As the
relation of contractor and contractee is voluntary, the
consequences attaching to the relation must be voluntary. What
the event contemplated by the promise is, or in other words what
will amount to a breach of contract, is a matter of
interpretation and construction. What consequences of the breach
are assumed is more remotely, in like manner, a matter of
construction, having regard [303] to the circumstances under
which the contract is made. Knowledge of what is dependent upon
performance is one of those circumstances. It is not necessarily
conclusive, but it may have the effect of enlarging the risk
assumed.
Public-domain text, read in full here on John Shaqi.
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