This article is written by Sai Aravind R, pursuing a Certificate Course in Advanced Civil Litigation: Practice, Procedure and Drafting from LawSikho.
Table of Contents
Introduction
But-for rule is a rule applied to confirm whether a person’s conduct is responsible for the events that happened. The rule establishes the connection between the act committed and the damage suffered. This rule is applied in different areas of law such as tort law, contract law and criminal law. This rule is mainly applied in tort law to constitute liability in negligence. The rule is also used in contract law, in determining the accountability of the party in breach of contract and also in computation of damages. Both in tort law and contract law, the causation of the event has to be proved. But-for rule is significant in establishing such causation.
The but-for rule has its application in different fields of law. But for the scope of this article, its application in contract law is focused upon. Hence its place and need of its application along with the process in contract law will be detailed.
Application of the Rule
But-for rule can be defined as a test applied to the facts in which it is checked whether the event would have occurred if the defendant’s action did not happen. If the events take place despite eliminating the defendant’s action, then the defendant will not be held liable. For example, let’s assume A and B are in a contract where A has to repair B’s car. A failed to repair B’s car properly and the car faced an accident. In order to prove that A’s liability for the causation of the accident, but-for rule has to be applied. The rule in this context tries to answer the question “But for the actions of the A, would the accident have occurred?”. If A could prove that the accident would have taken place regardless of the repair he has done, A cannot be held liable for the accident. This is how the rule works.
For a better understanding, the application of the rule in the criminal aspect can be seen in R v. White [1910] 2 KB 124. In which the accused poisoned his mother in her drink to kill her. But soon his mother died after a heart attack. It was found that she died of a heart attack before the poison could take effect. But for the actions of the accused, she would have still been dead. So, the accused was convicted only for the murder attempt. Likewise, in another case of R v. Pagett (1983) 76 Cr App R 279, the accused shot the police and when the police counter fired, he used a pregnant girl as a human shield. By which the girl died and he was held liable for the death of his girlfriend. The court held that but for the actions of the accused, she would not have died.
In tort law, the notable case is Barnett v. Chelsea & Kensington Hospital [1969] 1 QB 428. Here, a hospital negligently sent back a seriously ill man without examining. The person died the following day and the hospital was accused of its negligence. The court held that but for the negligence of the hospital, the person would have still died. Hence the hospital was held not liable for the death.
Law of Damages
In contract law, the but-for rule comes into use after the breach of contract to prove the liability and in claiming damages. Under the Indian Contract Act, 1872, Section 73 deals with compensation for unliquidated damages caused by the breach of contract and Section 74 deals with compensation for liquidated damages caused by the breach of contract. In order to claim such damages, the liability on a party has to be affixed. For which concepts like causation and remoteness of the damage have to be proven. In proving the causation, the but-for rule is applied.
In Reg. Glass Pty. Ltd. v. Rivers Locking Systems Pty. Ltd. (1968) 120 CLR 516, the defendant was supposed to install a security door and locking system on the plaintiff’s property as per the contract. The defendant failed on the duty and the plaintiff’s property was robbed subsequently. The Court held that but for the defendant’s breach, the loss would not have been suffered. That is the robbery would not have taken place if the defendant installed the door and locking system.
In India, the Supreme Court has applied the but-for rule in the case of Pannalal Jankidas v. Mohanlal and Anr 1951 AIR 144. In this appeal, the plaintiffs/ appellants were the agents of the defendants for purchasing piece goods and storing them in a government godown in Bombay. One such batch of goods was destroyed by fire due to an explosion in Bombay Harbour. The appellants received 50% of the damages for the goods as they were uninsured. They sued the defendants to indemnify them for the other 50% of damages as they were their agents. In response, the defendants stated that the appellants are supposed to insure the goods as per the contract and prayed before the court to set off damages claimed to the breach of duty of the plaintiffs. Here the Supreme Court used the but-for rule to establish the causation in this case. It was held that “But for the appellants’ neglect of duty to keep the goods insured according to the agreement, they (the respondents) could have recovered the full value of the goods from the government. So, there was a direct causal connection between the appellants’ default and the respondents’ loss”.
The rule was also applied by Andhra High Court in Union of India v. Chekka Ranganayakulu and Sons AIR 1964 AP 477. In this case, after the death of Sri Potti Sriramulu on 15th December, 1952 several crowds indulged in acts of hooliganism and violence. By which goods lying in the transhipment platform belonging to the parties in Bezawada railway station and other property pertaining to the railway administration were looted by the mob. Section 72 of the Indian Railways Act, railway administration is a bailee under Sections 151, 152 and 161 of the Indian Contract Act, 1872. Hence the railway administration was sued as they were responsible for the goods. The court held that “It should be remembered here that, but for the action of the mob the goods would not have been lost”. The court clearly held that even if leaving the goods on the transhipment is considered to be negligent, “but for the supervening event, the loss would not have occurred”.
Doctrine of Causation
It is quintessential in both tort law and contract law to prove the doctrine of causation. For a better understanding of the but-for rule, the concept of causation needs to be broken down. Causation can be simply defined as the link between the conduct of the defendant and the damage occurred. In personal injury cases where negligence is involved, it is necessary to show the presence of duty and the breach of such duty through causation. In establishing the causation, both the actual cause and proximate cause of the injury has to be shown. To show the actual cause which is the factual causation, the but-for rule is applied. This is the process to prove the act of negligence in tort law.
Such a similar process can also be found in contract law where in order to affix the legal liability on the defendant, it is necessary to show the causation. Such causation is further divided into factual causation and legal causation. As we have seen, the factual causation is proved using the but-for rule which is the basic test of all. But the but-for rule is not the sole test for causation. The High Court of Australia in the case of March v. Stramare (E. And M.H.) Pty. Ltd. [1991] HCA 12 has held that the but-for test is not the exclusive test of causation and inadequate in some cases. This is because it cannot address a situation where there is more than one cause of damage which is referred to as the chain of causation. Similarly, in Alexander v. Cambridge Credit Corp Ltd (1987) 9 NSWLR 310, it was held that in a case where several factors constitute a loss or damage, the but-for rule is only a guide and the ultimate question has to be whether, as a matter of common sense, the relevant act or omission was a cause.
Conclusion
The but-for rule originally introduced by the English Courts is used till date in many cases. Liability in different areas of law is determined on the touchstone of this rule. One such area of law is contract law. Once a contract is breached and damage arises, it is necessary to determine the liability. In proving such liability on a party for breaching the contract, the causation of the damage has to be shown. This is because, as long as the link of causation remains unbroken, the act of the accused is believed to have caused the consequence. The but for rule plays a vital part in establishing such factual causation of a case. This is how the rule is used in contract law.
References
- http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research_Papers/Law_of_Damages_in_India.pdf
- http://lawtimesjournal.in/doctrine-of-causation/
- https://legaldictionary.thefreedictionary.com/%22But+for%22+Rule#:~:text=The%20%22but%20for%22%20rule%20is,would%20have%20occurred%20without%20it.&text=In%20such%20cases%2C%20each%20cause,responsibility%20must%20attach%20to%20it.
- https://www.dbdlawfirm.com/2019/10/the-difference-between-proximate-and-actual-cause-in-a-personal-injury-case/
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