Reliance protection as the basis of contractual liability

Abstract

It is traditionally accepted that the basis of contractual liability is either consensus, that is the actual meeting of the minds of the contractants, or the reasonable belief by one contractants that there is consensus. In this paper the various approaches to contractual liability are examined. The conclusion that is reached is that the direct application of reliance protecti~n can -effectively serve as the basis of contractual liability in our law today. It is submitted that the elements to found contractual liability are representation or conduct, unducement; a reasonable reliance upon consensus, and detriment or prejudice. It is forcefully argued that although blameworthiness (fault) may play a substantial role in determining whether reliance upon consensus should be protected, it is not the decisive element to the enquiry: rather regard should be had to all the surrounding circumstances relating to the contractual relationship.