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The most obvious distinction between contract and tort can be found when considering the creation of the obligations on the parties. In contract, the parties create the obligations by way of terms and conditions. Contractual liability can only exist where there has been breach of an express or implied term agreed by the parties involved. However, tort obligations or duties are created by law and can arise in the absence of any agreement or consent by the parties. This distinction is not completely true in all cases, for example, a contract for the Sale of Goods is governed by the Sale of Goods Act 1979, and as a result of this there will be conditions implied into the contract imposed on the parties regardless of whether or not these have been anticipated. Similarly in tort there are certain situations where the parties are considered to have opted into a relationship and therefore the duties are not entirely imposed by law. These situations include; employers’ liability, occupier’s liability and product liability.Both contract and tort have very different purposes in respect of the award for damages. The damages for contract seek to put the claimant in the same position as he would be in if the contractual obligations had been carried out. The defendant is therefore liable for not ‘fulfilling the claimant’s expectation of benefit from the contract.’[1]However in tort the law seeks to restore the claimant’s situation to that of before the time when the tort had been committed. Again, there are exceptions to this distinction since some torts can provide a protection for loss of expectation. In particular, a tort action in respect of personal injury can bring about a claim for loss of future earnings. Another difference between contract and tort is that in contract, duties are owed only to the parties to the contract (with the exception of the Contracts (Rights of Third Parties) Act 1999) whereas in tort the duties are owed generally.


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