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Title: The case for contractual solutions in third party pure economic loss : a comparative review of the law in Germany, Greece, the United States, Scotland, England, Australia, Canada and New Zealand
Author: Mersinis, Themistoklis G.
Awarding Body: University of Edinburgh
Current Institution: University of Edinburgh
Date of Award: 1998
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The purpose of this thesis is to examine third party loss in a number of jurisdictions. Third party loss is the loss suffered by persons not party to a contract as a result of the violation of a contractual obligation. Compensation poses a problem when the violation is careless as opposed to intentional and the loss that is caused is purely economic. The starting point of this work is German law where, in order to protect third parties, two contract-based mechanisms have been judicially developed, because the law of delict, based on a system of restrictively enumerated, statutory delicts, provides no protection for pure economic loss. The two mechanisms are Drittschadensliquidation and contract with protective effects vis-á-vis third parties concerns the violation of protective duties which do not concern performance, affecting personal, property, and/or financial interests of the third party not related tot he performance. The mechanisms were developed mainly in the course of the present century and have expanded to numerous applications, for instance: indirect agency; expert opinion, including valuators' and auditors' liability; attorney liability; liability for services, works, medical treatment. The mechanisms, debated vigorously by theorists, are remarkable examples of judicial law-making. The mechanisms of German law, their applications, the theoretical bases, the relationship between them and the judicial activism that led to their formulation are presented and analysed. In Greek law, where the law of delict is based on a general clause and not on enumerated delicts, protection in delict for pure economic loss probably exists. Therefore, as in a similar system, that of France, third party loss is not a distinct, pressing problem. On the other hand, there are certain doubts whether delictual protection is certain or whether it is the best option. Thus the possibility of contractual solutions is worth examining, even if only to reject their relevance to Greek law. In American law, in comparison to other common law jurisdictions, more efficient protection for third parties exists. The third party beneficiary rule, a contractual mechanism to confer benefits to non parties, has expanded impressively. Moreover, liability in tort for pure economic loss is more extended than elsewhere in the common law world but, nevertheless, is substantially deficient. It is argued that contract could expand to cover cases of third party (pure economic) loss and that this is the most viable and preferable way for improvement. Despite the existence of a general clause in delict and the jus quaesitum tertio (a means to confer benefits on non parties by contract), Scots law is seriously handicapped in dealing with pure economic loss cases due to the influence of English law. It is argued that the Scots law of pure economic loss is not identical to English law and that reform by increasing the role of the contract is desirable and manageable, provided the necessary judicial determination is present. Among Commonwealth major systems, Canadian, Australian, New Zealand and English laws, the latter stands as an exception, clinging to traditional doctrines and applying, with few exceptions, an exclusionary rule to pure economic loss claims. In the other jurisdictions, otherwise so closely connected, the law is distinctly different. It is difficult to evaluate this different approach to pure economic loss. Commonwealth systems should also contemplate reform tending towards encouraging contract-based approaches. Most likely, this reform will require more than judicial law-making. The conclusion focuses principally on the desirability of an increased role for contract in third party loss cases, on the advantages of a more unified civil liability system - a system with greater intechangeability between contract and delict - and on the importance of judicial assertiveness in the process of keeping the law up-to-date and responding to new social needs.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available