Rebuilding the Citadel: Privity, Causation, and Freedom of Contract
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Description
One of the fundamental choices that the law must make in dealing with physical and financial harm is whether to deal with these through the legal commands of the tort law or through the business arrangements of private contracts. The modern direction on this question has tended to displace contractual arrangements, which frequently impose sharp restrictions on the recovery of consequential damages, with tort rules that allow an injured plaintiff to recover the full measure of compensation for physical injury while allowing contractual limitations to control the recovery for financial loss. One theme of this chapter is that the structure of the arrangements in the two cases are sufficiently similar to undercut that distinction in ways that allow contract rules to govern in both settings. A second theme is to examine the decline of the privity rules, which traditionally allowed a purchaser to sue only his or her immediate vendor for various forms of harm. The original justification of privity was an effort to force distant parties, for example, manufacturer and consumer when there is an intervening retailer, to get into privity with each other. But the actual history is otherwise in that the principle of freedom of contract was largely rejected at the same time that the privity limitation was overcome: contracting was not possible even for parties in privity. Ironically, however, the privity limitation continues to play a role in a number of important contexts, environmental and financial losses, where unlimited liability is thought to be potentially ruinous.
Source Publication
Exploring Tort Law
Source Editors/Authors
M. Stuart Madden
Publication Date
2005
Recommended Citation
Epstein, Richard A., "Rebuilding the Citadel: Privity, Causation, and Freedom of Contract" (2005). Faculty Chapters. 399.
https://gretchen.law.nyu.edu/fac-chapt/399
