What is Detriment in Relation to the Law
In its simplest form, ‘detriment’ can be defined as harm or damage that results from an action. While this is an appropriate definition of detriment when used in every day terms, the terminology carries far more weight in the legal sector, and in particular within contracts of agreement. The legal definition of detriment refers specific to any monetary harm a person suffers as a result of an act or decision. In a legal context, it is intended to protect the injured party from a claim to which they would otherwise be susceptible. One particular legal concept which embodies the definition of detriment is promissory estoppel. Widely used in contract law , it is designed to avoid the injustice which would otherwise result where one party relies upon a promise to their detriment. In effect, it is a method of securing performance of an agreement, which may not hold up in absolute contractual terms. Estoppel applies to situations where it can be proven that one party makes a promise without consideration being provided to the other party before a contract is created, and therefore no legal effort was put into the basis of the agreement. Such collateral agreements may include an implied agreement between two parties, or perhaps a statement made regarding a principal idea in relation to a contract. Legal focus is placed on the decisions taken by one party, and whether they are reasonable and made in good faith.
Detriment and Consideration in Contracts
Detriment and consideration are entwined in the very nature of contractual agreement. In order for an agreement to be enforceable, the party receiving the promise must provide consideration for it. Consideration is the legal benefit or detriment that motivates the contracting party to come to an agreement. Simply put, is the promise or performance worth something to the receiving party? If so, they’re likely to enter into a contract. Consideration can take the form of money, property, services, or a promise to give or refrain from doing something. In essence, it is anything of value.
This doesn’t, however, mean that "consideration" must enter into the contract under the name of money or goods. Oral contracts are still valid, without any consideration offered and with just a verbal agreement. Contracts don’t need to be in writing — they need consideration, which means a detriment. Mere voluntary promise does not offer consideration, and a gratuitous promise cannot be assigned in court as a "determinant value" in what would otherwise be considered a legal contract. In order for consideration to be present, the promise must be made in exchange for some degree of gain or benefit.
Because of the relationship between consideration and detriment, a presence of benefit will always be accompanied by or result in a detriment to the promisor. Detriment will also include an obligation, harm, loss, or give up of some sort that will befall the promisor.
Detriment – Legal Examples
To further illustrate how detriment works in legal contexts, consider the following examples:
1. Breach of Contract
In contract law, a classic definition of consideration is that it is "the price paid for a promise". A contract is formed when there has been an agreement between two parties to trade something of value. The agreement must be mutual and cannot be based on duress. Therefore, when an individual or organization makes a promise and someone acts upon it, it is a form of consideration. In the case of Giumelli v Westpac Banking Corporation (1999), the Supreme Court of Australia held that where the conduct of either party to an agreement has caused a detrimental change of position to the other, the offending party will be prevented from going back on their promise, even in the absence of consideration (the legal term for a binding agreement). This is called "detrimental reliance", and basically means that one party to the agreement has relied upon the promise of the other party to their detriment.
2. Neighbourhood Disputes
On the February 16 2006, a High Court of Australia decision was handed down in the case of amp; Kane v Scott Charles Developments Pty Ltd & Ors (2006). In this case, Kane (the plaintiffs) sought an injunction and damages against Scott Charles Developments (the defendants) for trespass and nuisance. Kane bought undeveloped residential property with a view to building residential units, upon which they sought expert advice and were told that a stormwater drain ran through their property and needed to be relocated. Gouldson Consulting Planners (the original owner) was contacted to perform these drainage works, and upon completion of the relocation, Kane allowed Gouldson and the experts onto their property so that they could inspect the work which had been performed to advise if any further works were needed. During the inspection, the expert discovered that the newly located drain was not connected, and therefore useless. Kane then notified Gouldson, who claimed to have thought that the drain was connected. After being notified, Gouldson then left the inspection but continued to allow others access to Kane’s property. During the time that Gouldson and the experts were still on the property, Kane saw the construction of a massive dirt embankment on the neighbouring property, and asked Gouldson for permission to go onto that property to inspect the damage. Gouldson said yes, and gave permission for the use of a bobcat from the neighbouring property. Upon inspection of the surrounding land, it was found that Kane’s property had been severely damaged as a result of the works which were performed. Kane went on to take legal action against Gouldson and the builders of the embankment for the damage which they alleged they had sustained because of it. The High Court decided that Kane was successful, claiming that Gouldson had given permission for Kane to enter the neighbouring property, and as such Kane had relied upon that promise to their detriment. This was considered detrimental reliance, and as such the Courts held that Kane was successful in their claim and were entitled to damages.
3. Promissory Estoppel and Detriment
Promissory estoppel and detrimental reliance often overlap in legal matters. In the law, there exists a concept known as promissory estoppel, which states that the promisor is estopped from denying the promise (or going back on their promise) when to do so would cause the promisee some detriment. In domestic law, a promissory estoppel is a binding replacement for consideration, where the promisor has acted in reliance on the promise. Without a promissory estoppel, the promise may not be enforced by the Courts.
Detriment in Employment Law
Detriment comes into play in employment law, for example in the context of a detriment claim, which may arise in the context of workplace discrimination or unfair treatment. If an employee making the claim can prove that they have suffered a detriment, either directly (e.g. they suffered harassment) or indirectly (e.g. they were not promoted or received an unfair warning), they may have redress. The employee does not need to show that they have lost money.
An employer can be vicariously liable for the actions of employees acting within the scope of their employment. The employer’s liability is in addition to the liability of the wrongdoer. So, even if an employee has left the company, leaving only a small number of employees in a position to bring a claim, the employer may still be liable.
As an example, an employee may have suffered a detriment at the hands of their employer because of the employee’s "protected characteristic", such as sex or disability, in breach of the Equality Act 2010. The employee could decide to try and claim both kinds of damages. The employee can bring a claim against the perpetrator of the harassment , and also against the employer which he or she alleges is vicariously liable for it. It is possible to bring both claims in one case.
Section 47B of the Employment Rights Act 1996 (ERA 1996) protects employees from being subjected to a detriment by their employer due to having taken part in certain protected activities (e.g. bringing proceedings against their employer for not paying wages or hours worked). Restrictively, it will only apply where the employee’s detriment constitutes an actual disadvantage (e.g. they are forced to leave work early because they are not paid correctly, meaning their pay is less than they should’ve received).
In Williamson v Leeds City Council, an education psychologist brought a claim for detriment on the basis that there had been a detrimental reference given to her new employer by her previous employer when she had left. In order to be liable for an act of harassment, there needed to be knowledge on the part of the perpetrator that the targeted employee had a protected characteristic and that that characteristic was the basis for the harassment.
The test for this is whether reasonable adjustments made by the employer were inadequate to deal with the needs of a worker who is "disabled" for the purposes of the Equality Act 2010 (EqA 2010). This is a test of foreseeability: if the employer is expected to know that reasonable adjustments would be ineffective, it cannot be liable for a detriment caused by those adjustments. This is a useful catch-all provision.
How Courts Determine Detriment
Courts assess whether a detriment has occurred so as to be able to determine what specific remedies may be available. For example, in the realm of tort law, a plaintiff must prove that they have suffered some sort of detriment before they can hope for an award of damages from a negligent defendant. The presence or absence of any detriment is usually the first question a court will identify and seek to resolve in the context of any area of law.
The Courts in Australia no longer hold strict to the English Common Law requirement that a plaintiff prove that they have suffered a detriment before bringing a claim by way of a strict reliance on the contract that exists between them and the wrongdoer. Instead, the Australian Courts will broadly consider whether the party complaining of a breach of a legal duty has suffered a detriment in an attempt to ensure that rights are protected where appropriate. As such , a detriment can be independent of any damage to a person’s person or property. A detriment can be the mere loss of opportunity to engage in any form of commercial or economic activity – simply losing out on what could have been as a result of the breach of a legal duty.
When Courts assess whether a detriment has occurred the Justices will broadly canvass a range of issues that the evidence may be directed to. These issues include:
Not all Courts will publish their finding on every factor. However, it is useful to keep in mind the various criteria available to assess whether a detriment has been suffered and to include evidence on all or some of those factors that are relevant to establishing that a detriment has occurred.