A history of the action of deceit on the case and related developments in contract law

Abstract

My thesis traces the common law’s initial inability to provide a remedy for fraudulent contract-making other than that provided in the action of deceit on the case for a breach of warranty. By and large this was the result of an evidential rule in covenant that a contract had to be evidenced in a sealed instrument (ie. a specialty). This test for an assumption of contractual obligation prevented the courts from receiving inferior oral evidence of fraud in defence to the contract. A limited remedy for fraud was provided in the form of the action of deceit on the case where liability was based on tricking another person into contracting on the basis of a false warranty. Evidence of fraud in the action of deceit on the case was reduced to proving a breach of warranty. Any injustice created by the common law’s inability to provide a defence or remedy for other types of fraudulent contract-making was either relieved in equity, or through the passage of time and gradual common law development, by new common law actions, rules of evidence and methods of trial. By far the most significant development in this regard was the establishment of a remedy for fraud in money had and received in the late seventeenth century, which led to the common law rule allowing for rescission of a contract for fraud. Any money passed under the fraudulently induced contract could be recovered in money had and received following rescission. Likewise, the value of any personal property transferred under the fraudulently induced contract could be recovered in trover following a rescission. Related developments saw warranties become actionable in special assumpsit (ie. contract), and a generic remedy for actual fraud develop in the modern tort of deceit.