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RDG
online Restitution Discussion Group Archives |
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At 13:02 17/12/97
+0000, Peter Birks wrote:
Lionel must be right. The right to rescind can
only belong to contract in a contextual sense. That is, it belongs in
the law which is about contract. Contract law *is* the law about contracts. Contracts
are creatures of the law. It makes no sense to distinguish between "contract
law" and "contextual contract law" : the context of contract law is necessarily
a legal context.
When we look at the events from which rights
arise, we can rarely derive a right to rescind from contract. We can when
the parties have provided expressly for a right to rescind in certain
events. In all other cases the right to rescind is raised by operation
of law. All contractual rights involve the operation of law :
that is why we look in law books to determine the legal effects of contracts,
rather than merely interviewing the parties. Many rules in contract cannot
intelligibly be derived from the intentions of the parties, eg rules on
formalities, offer and acceptance, and consideration.
All rights which arise by operation of law arise
from a wrong, an unjust enrichment, or some other event. Because in the
leading case Lord Browne-Wilkinson repeatedly called misrepresentation
a wrong and undue influence a wrong, many will think that the O'Brien
right to rescind arises from a wrong. That cannot be correct, unless Lord
Browne-Wilkinson meant to restrict the relief to those cases in which
the facts can be re-analysed as a wrong, thus excluding, for example,purely
innocent misrepresentation and many instances of undue influence. If we
reject the notion that the right to rescind arises from a wrong, we are
left with only the other two categories. Since the purpose and effect
of recognizing the right to rescind is to cause the bank to surrender
a benefit which it wants very much to hang on to but which the law evidently
regards as one which ought not to be retained, it does not seem incorrect
to attribute the right to rescind the security to unjust enrichment. There is no particular difficulty in treating morally
blameless conduct as "wrong" - witness the common law tort of conversion
and the statutory tort of supplying defective products. The incorrectness
lies not in invoking unjust enrichment, but in supposing that invoking
unjust enrichment somehow excludes other explanations.
Steve Hedley
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