Law and Economics for Civil Law Systems
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Law and Economics for Civil Law Systems

Ejan Mackaay

Ejan Mackaay offers a comprehensive look at the essential points of economic reasoning, the Coase Theorem, and legal institutions such as intellectual property, extra-contractual civil liability and contracts. The book’s structure mirrors the way law is taught in civil law countries, with structured presentations, references to civil code articles paired with non-technical explanations, and limited reliance on graphs. This English-language version builds on the success of the author’s 2008 French-language textbook on law and economics from a civil law perspective.
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Chapter 10: Extra- contractual civil liability

Ejan Mackaay


A good point to start our discussion of civil liability is the 1973 Quebec appeal case of Katz v. Reitz,1 decided under the old Civil Code. The Court of Appeal found that a property owner who, whilst constructing an apartment building on his own land, caused a neighbour’s single family dwelling to collapse had to pay compensation, even though he had taken all reasonable precautions to prevent such collapse from happening. At first sight, the decision seems classical: those who violate other people’s rights have to pay compensation for the damage thus caused. Compensation restores balance. This rule was codified in the new Quebec Civil Code of 1994 in articles 991 and 976.2 Yet at the time, the decision caused an uproar. It seemed to abandon the civil law principle that bases extra- contractual civil liability, also called delictual or quasi- delictual liability, on fault (faute in French, culpa in Latin) or wrongful behaviour.3 Fault is conduct not in keeping with what an informed, prudent person would have done under the circumstances. What this standard requires may vary over time and from place to place; it may depend on the nature of the fault, on the particular knowledge and skills of the wrongdoer, as well as on local practices and customs.

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