This article on ‘Negligence Under Contract‘ was written by Swaroopa Royadu an intern at Legal Upanishad.
Negligence is civil wrong as well as criminal wrong. How will we determine whether the act was done negligently? Which acts are considered civil negligence and which acts falls under the category of criminal negligence? Are the Breach of contract and Negligent acts similar? What are the consequences if there is negligence in the contract? The answer to all these questions is covered in this article. The Article emphasizes negligence under contract.
Meaning of Contract and Negligence
To understand the concept better, it is essential to know the meaning of the contract and the meaning of negligence in brief.
- Contract: An agreement between 2 or more people, which binds the parties with obligations and duties. Such contracts are enforceable under the law. Essentials of contract:
- There must be an offer and acceptance between parties.
- The agreement must be done with free consent.
- The agreement must always have lawful consideration.
- The objective must be lawful with the intention to create a legal relationship.
- The parties to the contract must be competent.
- Negligence: In simple words negligence means actions done carelessly. If such a matter is taken to court, it is called negligence. In legal terms, when a person fails to exercise the standard of care which the doer as a reasonable man should have exercised in the circumstance is considered negligence. Essentials of Negligence:
- Existence of the duty that should be taken care of.
- Such duty should be towards the plaintiff.
- There should be a breach of duty by the defendant.
- On failure to perform the duty by the defendant, the plaintiff should have suffered damages or harm.
What is Negligence Under Contract?
The term negligence under contract covers 2 aspects, breach of contract and professional negligence.
- Breach of contract: The term breach of contract is an act where the party fails to perform or act according to the contract agreed upon.
Example: Zebo Company agreed to transfer 50 laptops to Bagrey Company on 15th December. Zebo failed to deliver 50 laptops on 15th December which resulted in financial loss for Bagrey Company. This is a breach of contract.
- Professional negligence: The term professional negligence is when the person fails to meet some standards that are been set.
Example: The patient is admitted to a hospital that gives complete care to its patient including their food and medication. Nurse failing to give the patient medication and food on time results in professional negligence.
Allegation or charge of Negligence in the profession can lead to a breach of contract. The difference between Contract and Negligence can be understood broadly under the following headings.
- Relationship of parties:
Under contract parties are legally binding according to the terms of the Agreement.
Under negligence, parties are not binding by any agreement. The parties may know each other [ in case of doctor and patient relation] or the parties may not know each other [ in case of an accident of 2 trucks].
- Nature of obligation:
The obligations of the parties in the contract are binding according to the terms and conditions of the agreement.
The obligations under negligence are imposed by statute or by the law.
- Remedies for damages:
The remedies available for breach of contract are remedies of injection, remedies of specific performance, and monetary remedies.
Once the negligence is established the next step is to provide the proper remedy. The remedy for negligence is determined by putting the claimant in the position that he would have been in had the breach of obligations not taken place.
Case laws on negligence under contract:
Union of India Vs Steel stockholders syndicate, Poona: The suit was filed by the plaintiff for recovery of the damages caused by the defendant [Railways], for breach of contract. Plaintiff carrying the iron business booked a consignment with the defendant on 15/Dec/1961 at Bhillai to be delivered to Poona in good condition. Defendant accepted the offer and provided the receipt for the same. The consignment did not reach on time and when the plaintiff inquired, he found the consignment delivery was delayed as the railway diverted the goods to Aurangabad instead of delivering the goods directly to Poona. Later, on the plaintiff delivering the notice to the defendant for the delay, the consignment was delivered in the Month of May/1962.
Plaintiff held the defendant for gross negligence and breach of contract which caused the plaintiff damages and losses.
The Trial court found that there was a delay in delivering the goods, and the railway has taken the diversion to a new route with consignment hence defendant was held guilty of gross negligence and is therefore responsible for the loss of Plaintiff.
In an appeal, the upper court upheld the decision of the trial court and held the defendant liable for gross negligence resulting in a breach of contract.
How will the court determine if the act was done negligently?
- If the party to the contract owes any duty towards the other party and fails to perform it or perform such acts which were not necessary to perform;
- When the action performed is not to the normal standards set or there is a deficiency in the act or service performed
- Such acts cause damages to the other party, by considering these 3 factors the court determines whether the act was done negligently.
Which acts are civil negligence and which acts are considered criminal negligence?
Contacts can be either expressed or implied. Implied contracts include the relationship between Doctor and Patient, where the doctor agrees to treat patients for consideration. The difference between civil and criminal negligence in the contract can be explained with an example of a Doctor and patient
Civil negligence is the lack of care, knowledge, or skill of the Doctor that causes damage to the patient. Examples: Diagnosing wrongly, suggesting the wrong medication, prescribing overdosage, etc. The suits are filed in civil courts or consumer courts.
Criminal negligence is gross negligence in treating the patient which results in severe injuries or damages to the patient resulting in death sometimes. Example: operations that lead to paralyzing the patient, doing operation wrong side, wrong medication resulting in the death of the patient, etc. The trial for criminal negligence is done in criminal court. Punishment will be granted under Sections 336, 337,338, and 304(A) of the Indian Penal Code.
Charges of negligence in the profession can lead to a breach of contract. Negligence takes place when a person fails to meet the required standards. Negligence in contracts can be civil negligence or criminal negligence. For a negligent act, one can get monetary remedy under a civil suit or imprisonment under a criminal trial. Law does not protect the person performing a negligent act. Contributory negligence can be used as a weapon by the defendant as a negligent act from both parties can reduce or remove the punishment of the defendant.
- “What is contract negligence”, Tech Insurance, 15 July 2022, available https://www.techinsurance.com/resources/what-is-contract-negligence last visited 06/12/2022
- “Key aspects of the law of contract and the tort of negligence”, Acca Global, available at https://www.accaglobal.com/gb/en/student/exam-support-resources/fundamentals-exams-study-resources/f4/technical-articles/key-aspects-of-the-law-of-contract-and-the-tort-of-negligence.html, last visited 06/12/2022
- Dr. J Magendaran “Professional Negligence: Essential ingredients and Types”, Prep Ladder, available at https://www.youtube.com/watch?v=dxr1-U6zsb0 last visited 06/12/2022.