Insider Trading in Israel and England, Part II
It is submitted that even if the hapless outsider cannot bring an action for damages because of the existing state of the law regarding fiduciary duties and breach of statutory duties, he still has an equitable remedy of rescission of the contract based on quasi-contractual principles. The crime of fraud, under secs. 13 and 54, respectively, would be made the basis of setting the contract (of sale or purchase) aside. To support this proposition we shall explore the quasi-contractual principles which enable one contracting party, the victim of a crime committed by the other party in entering the contract, to defeat this contract.In Browning v. Morris, in an oft-quoted statement by Lord Mansfield, the following principle was declared: But, where contracts or transactions are prohibited by positive statutes, for protecting one set of men from another set of men; the one, from their situation and condition, being liable to be oppressed or imposed upon by the other; there, the parties are not in pan delicto; and in furtherance of these statutes, the person injured, after the transaction is finished and completed, may bring an action and defeat the contract.