D. Continuity and Change

Author:John D. McCamus
Profession:Professor of Law. Osgoode Hall Law School, York University

Page 18

The fact that the general principles of the law of contracts are generated, for the most part, by judicial decisions on a case-by-case basis under the common law method has implications for the extent to which and the manner in which the law of contracts changes over time. A number of considerations weigh in favour of the continuity or stability of the doctrines of contract law. Elementary considerations of fairness and predictability, often associated with the notion of the "rule of law," weigh in this direction. The desirability of deciding like cases in like fashion and in enabling parties to plan their affairs and predict the outcome of litigation on the basis of reasonably stable knowledge concerning the nature of the governing legal regime creates a need for stability and certainty in the law. The common law method itself creates further pressure in this direction. The doctrine of stare decisis or precedent, which holds that courts are bound to follow prior judicial decisions of courts higher in the judicial hierarchy than the deciding court, draws its strength from the need for stability and certainty in doctrine.42Further, the fact that

Page 19

judicial responsibilities are being discharged by unelected judges in adjudicative processes that are not well suited to public policy formulation is likely to lead courts to be somewhat circumspect in exercising their undoubted capacity to reformulate and modify prior doctrine.43

It is not surprising, then, that continuities in contract doctrine can be traced over long periods of time. Thus, the history of contemporary doctrines such as the law of consideration and the law of contractual performance can be traced to their origins in medieval doctrines.44At the same time, it is beyond serious question that courts in the common law system are the custodians of common law subjects like contracts, torts and restitution and that it has been judicial decision-making rather than legislative reform that has dramatically transformed the common law on these subjects over time. Although judicial decision-making in the context of statutory interpretation and constitutional law, for example, is an important but perhaps secondary source of doctrine concerning such matters, in the context of other areas of the law, such as the private law of obligations, the judicial role in the production of doctrine is of central importance. Although the importance of that role is rarely trumpeted by the courts, judicial acknowledgments of the responsibility of the courts for undertaking even major reforms of private law are occasionally to be found in reported decisions. Thus, in Kleinwort Benson Limited v. Lincoln City Council,45a decision of the House of Lords in which an important change to the law relating to the recovery of monies paid under mistake was achieved, Lord Goff observed as follows:

We all know that in reality, in the common law as in equity, the law is the subject of development by the judges - normally, of course, by appellate judges. We describe as leading cases the decisions which mark the principal stages in this development and we have no difficulty in identifying the judges who are primarily responsible. It is universally recognized that the judicial development of the common law is inevitable. If it had never taken place, the common law would be the same now as it was in the reign of King Henry II; it is because of it that the common law is a living system of law, reacting to new events and new ideas, and so capable of providing the citizens of this country with a system of practical justice relevant to

Page 20

the times in which they live.... When a judge decides a case which comes before him, he does so on the basis of what he understands the law to be. This he discovers from the applicable statutes, if any, and from precedents drawn from reports of previous judicial decisions. Nowadays, he derives much...

To continue reading