Breach of contract: Difference between revisions
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What happens when you don't do what you oughta. | |||
===Quelle [[domage|damages]]=== | |||
''Just because one party breaches the contract, it doesn't mean the other suffers a loss. Just because one party suffers a loss, it doesn't mean the other breached the contract.'' <br /> | |||
For very sound reasons the law of [[contract]] imposes limitations (“[[causation]]”, “[[proximity]]” and “[[remoteness of damage]]”) on the [[damages]] a party may recover for breach of contract:<br /> | |||
*'''Causation''': The breach needs to be the operating cause of the innocent party's loss; | |||
*'''Remoteness''': They need to have been the sorts of losses the parties reasonably contemplated might arise from a breach when they entered the contract – i.e. they need to be reasonably foreseeable - the "usual consequences" of a breach of the contract. | |||
These ordinary principles apply pragmatically to limit the damages a party must pay to what is reasonable for what that party was responsible. | |||
Compare with an {{tag|Indemnity}} where one party agrees to be responsible for a loss the other suffers even when the first ''doesn't'' breach the contract. | |||
===See=== | ===See=== | ||
*[[Indemnity]] | |||
*[[remoteness of damage]] | *[[remoteness of damage]] | ||
*[[consequential loss]] | *[[consequential loss]] | ||
{{c|Damages}} | {{c|Damages}} | ||
Revision as of 11:53, 8 June 2016
What happens when you don't do what you oughta.
Quelle damages
Just because one party breaches the contract, it doesn't mean the other suffers a loss. Just because one party suffers a loss, it doesn't mean the other breached the contract.
For very sound reasons the law of contract imposes limitations (“causation”, “proximity” and “remoteness of damage”) on the damages a party may recover for breach of contract:
- Causation: The breach needs to be the operating cause of the innocent party's loss;
- Remoteness: They need to have been the sorts of losses the parties reasonably contemplated might arise from a breach when they entered the contract – i.e. they need to be reasonably foreseeable - the "usual consequences" of a breach of the contract.
These ordinary principles apply pragmatically to limit the damages a party must pay to what is reasonable for what that party was responsible.
Compare with an Indemnity where one party agrees to be responsible for a loss the other suffers even when the first doesn't breach the contract.