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Breach of contract: Difference between revisions
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===Quelle [[damages|domage]]=== | ===Quelle [[damages|domage]]=== | ||
''Just because one party breaches the contract, it | ''Just because one party breaches the contract, it doesn’t mean the other suffers a loss. ''<br /> | ||
''Just because one party suffers a loss, it | ''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 /> | 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 | *'''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 | *'''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. | These ordinary principles apply pragmatically to limit the damages a party must pay to what is reasonable for what that party was responsible. | ||
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====Since Hadley==== | ====Since Hadley==== | ||
A bunch of garlanded cases, some [[Victoria Laundry v Newman - Case Note|involving laundry]] and others [[Koufos v Czarnikow (The Heron II) - Case Note|named after ships]], have drummed out this original dicta. Chitty would summarise these as concluding that a loss is not too remote a consequence of breach if, at the time of contract, the consequence it was within their reasonable contemplation as a not-unlikely result of their breach. | A bunch of garlanded cases, some [[Victoria Laundry v Newman - Case Note|involving laundry]] and others [[Koufos v Czarnikow (The Heron II) - Case Note|named after ships]], have drummed out this original [[Obiter dicta|dicta]]. Chitty would summarise these as concluding that a loss is not too remote a consequence of breach if, at the time of contract, the consequence it was within their reasonable contemplation as a not-unlikely result of their breach. | ||
===[[Consequential loss]]=== | ===[[Consequential loss]]=== | ||
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===[[Indemnities]]=== | ===[[Indemnities]]=== | ||
Compare with an {{tag|Indemnity}} where one party agrees to be responsible for a loss the other suffers even when the first '' | 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]] | *[[Indemnity]] | ||