First Principles of Business Law

15. Tort, crime and contract

15.2. Distinguishing tort and contract

Although the same facts often create liability both in contract and in tort some general points of difference can be made.

1. Contractual duties arise by virtue of voluntary agreements between contracting parties. Tortious duties are mainly created by law.

2. Tort aims principally at the prevention of harmful conduct, or at providing compensation for wrongful harm, whereas the essential purpose of contract law is to make people legally liable for their promises.

3. The standard of behaviour expected from a defendant in tort is that of a 'reasonable person'. In contract, the standard applied to determine questions of breach is usually agreed by the parties to the contract, or is implied as a term in their agreement.