No consequential loss - GMSLA Provision: Difference between revisions

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 There’s a lovely long essay about [[consequential loss]], at the [[consequential loss]] page. Consequential losses are not generally available as a measure of [[damages]] under a {{t|contract}} (historically they were excluded as a rule; nowadays the [[common law]] regard it as a simple question of whether the [[loss]] was properly [[Causation|caused]] and [[reasonably foreseeable]]; losses that are consequential in nature may be forseeable, but it will only be in unusual circumstances.
-that is the general position. Specifically under the GMSLA [[consequential loss]] is expressly excluded because they are, by nature, speculative, indeterminate and not [[reasonably foreseeable]] in the context of a stock lending arrangement. By nature, parties to a [[stock loan]] do not have in mind the potential profits each other could make with the securities or collateral transferred under the loan: No {{gmslaprov|Lender}} expects to underwrite the value of the Borrower’s lost opportunity to short if it fails to settle a {{gmslaprov|Loan}}. Each {{gmslaprov|Loan}} is designed to be easily cancellable at will by either party. There are specific self-help remedies for settlement failures (e.g.,{{gmslaprov|Buy-In}}s). It is hard to see how there could be any expectation that consequential losses would be available for breach, and it helps for the {{gmsla}} to make that explicit. It reflects the industry expectation, and takes away the temptation, sore for many [[Mediocre lawyer|underoccupied lawyers]], to argue that for some special reason — and here one should never underestimate the boundless imagination (or paranoia) of an underoccupied lawyer, particularly during the contract [[negotiation]] phase, to confabulate hypothetical special reasons<ref>I have seen it argued that a counterparty’s “fraud or wilful misconduct” is such a reason. But why? For what reason would ''why'' a contract is breached matter to the measure of damages for that breach?</ref> — that consequential loss might be appropriate in some cases.
+That is the general position. Specifically under the GMSLA [[consequential loss]] is expressly excluded because they are, by nature, speculative, indeterminate and not [[reasonably foreseeable]] in the context of a stock lending arrangement. By nature, parties to a [[stock loan]] do not have in mind the potential profits each other could make with the securities or collateral transferred under the loan: No {{gmslaprov|Lender}} expects to underwrite the value of the Borrower’s lost opportunity to short if it fails to settle a {{gmslaprov|Loan}}. Each {{gmslaprov|Loan}} is designed to be easily cancellable at will by either party. There are specific self-help remedies for settlement failures (e.g.,{{gmslaprov|Buy-In}}s). It is hard to see how there could be any expectation that consequential losses would be available for breach, and it helps for the {{gmsla}} to make that explicit. It reflects the industry expectation, and takes away the temptation, sore for many [[Mediocre lawyer|underoccupied lawyers]], to argue that for some special reason — and here one should never underestimate the boundless imagination (or paranoia) of an underoccupied lawyer, particularly during the contract [[negotiation]] phase, to confabulate hypothetical special reasons<ref>I have seen it argued that a counterparty’s “fraud or wilful misconduct” is such a reason. But why? For what reason would ''why'' a contract is breached matter to the measure of damages for that breach?</ref> — that consequential loss might be appropriate in some cases.
 ===Subject to Paragraphs {{gmslaprov|9}} and {{gmslaprov|11}}===