Passing Off And The Economic Delicts

Question 1

What is the institutional definition of fraud?

Answer 1

“A machination or contrivance to deceive, by words or acts”.

Question 2

When is fraud established?

Answer 2

Where an untrue statement or representation is made, or where the statement is believed to be untrue or where the person making the statement is recklessly indifferent to its truth or falsity.

Question 3

What is passing off?

Answer 3

Broadly, passing off is an attempt by a trader to appropriate the goodwill of another trader.

This occurs where the name or “get up” of a product is sufficiently similar to another product to amount to misrepresentation that will confuse customers.

Question 4

What form of loss is associated with passing off?

Answer 4

Loss is in the form of reduced sales or damaged reputation.

Question 5

What is the primary remedy in passing off?

Answer 5

Interdict

(Damages may also be available, although the process of quantifying loss may present problems).

Question 6

What are the essential elements of passing off as set out by Lord Diplock in Ereven Warnink BV v J Townend & Sons (Hull) Ltd (no.1)?

Answer 6

1. There is a misrepresentation
2. The misrepresentation is made by a trader in the course of trade
3. The misrepresentation is made to prospective customers of theirs or ultimate consumers of goods and services provided by them.
4. The misrepresentation is calculated to injure the business or goodwill of another trader
5. The misrepresentation has caused or probably will cause damage to the business or goodwill of the other trader

Question 7

What are the three economic delicts?

Answer 7

• inducing breach of contract
• causing loss by unlawful means
• conspiracy

Question 8

In what case was the model regarding economic delicts established?

Answer 8

OBG v Allen

Question 9

When does liability for inducing breach of contract arise?

Answer 9

When A induces B to breach her contract with C causing C to suffer economic loss. B will be liable to C for breach of contract and A will be liable to C in delict.

Question 10

What are the requirements for liability set out in Global / Resources Group v Mackay?

Answer 10

1. There must have been a breach
2. A must have known of the contract
3. A must have intended to induce the breach
4. A must have in fact induced the breach

Question 11

Sufficient knowledge may be inferred from a conscious decision not to enquire into the possibility of contractual terms or their breach.

True or false?

Answer 11

True … to an extent …

Case law suggests this.

Question 12

When does the delict of causing loss by unlawful means arise?

Answer 12

When A uses unlawful means against B to cause economic loss to C.

Unlawful means in this context, is action that would make A civilly liable to B and that limit’s B’s freedom to deal with C.

Question 13

What is the definition of conspiracy in terms of delictual action for economic harm?

Answer 13

Where two or more parties combine with the intention of causing economic harm, then delictual liability will arise.

Question 14

What are the two forms of conspiracy?

Answer 14

• “lawful means”

- “unlawful means”

Question 15

Where two or more parties act in combination, employing lawful means to do so, will they be liable to the pursuer?

Answer 15

There will be no liability unless it can be shown that harm to the pursuer was the predominant nature.

(Crofter Hand woven Harris Tweed Co Ltd v Veitch)

Question 16

The onus is on the pursuer to establish predominant motive to harm. They must also establish economic loss.

True or false?

Answer 16

True