Private Law Theory

ABSTRACT
The tort of inducing breach of contract poses a theoretical challenge for accounts of private law grounded in corrective justice theory. It implies the possibility of third-party liability for certain interferences with a contractual relationship, which is in tension with the conventional characterization (accepted by many corrective justice theorists) of contract and property rights as in personam and in rem, respectively. In this paper, we propose an alternative, Kantian account of the distinction between contract and property rights to resolve this dilemma. Although it is commonly assumed that the in personam / in rem distinction is captured by the number of persons against whom the right is exigible, we argue that the distinction inheres in the substantive nature of the right itself, namely, whether its object is a thing or is the causality of the duty-holder. It follows that there is no inherent reason why contractual rights cannot bind third parties to some degree, even if classed as in personam. This conception of rights yields a revised account of the nature and scope of the inducement tort, which situates it more robustly within a corrective justice framework.

Part II of this paper examines two extant accounts of the tort of inducement, both grounded in corrective justice theory – the ‘public right thesis’ and the ‘proprietary thesis’. We identify some flaws in each account, but argue that both proceed from a shared assumption: that a contractual right either binds only the promisor or, if it is accepted as having erga omnes effects, must be conceived as a property-like right with an in rem dimension. Part III contends that this assumption is based on the Hohfeldian model of rights in personam and in rem. Contrasting that view to Kant’s juridical theory of rights, we develop an alternative account of the distinction. Part IV applies the Kantian conception of contractual rights and proposes an account of the tort of inducing breach of contract and similar equitable doctrines. This account justifies the ascription of liability on third parties for inducing breach of contract, in a manner consistent with the theory of corrective justice and without eroding the distinction between contract and property rights. From the standpoint of the Kantian model of rights, the tort of inducing breach of contract and related forms of equitable relief are intelligible expressions of corrective justice in the domain of private right.

Sérafin, Stéphane and Sun, Kerry, Corrective Justice and In Personam Rights: Reconsidering the Tort of Inducing Breach of Contract (August 6, 2023), Supreme Court Law Review, 2nd Series, 2024.