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Now the [[common law]] already has a sophisticated means for allocating losses between the parties to a commercial bargain. It is called the law of [[contract]]. {{t|Contract}}s are simple things: each party has something the other wants; by contract, they memorialise the willing exchange. Should either side not keep to the bargain, the other may sue. | Now the [[common law]] already has a sophisticated means for allocating losses between the parties to a commercial bargain. It is called the law of [[contract]]. {{t|Contract}}s are simple things: each party has something the other wants; by contract, they memorialise the willing exchange. Should either side not keep to the bargain, the other may sue. | ||
[[Contractual damages]] are limited only by the depraved imagination of your lawyer: [[loss of bargain]], [[loss of opportunity]], [[consequential loss]], [[tax]]es, [[reputational damage]], [[restitution]], [[hedge]]-breakage costs, [[emotional distress]], [[nervous shock]], (needless to say, but inevitably said) legal costs and, if that is not enough, [[ | [[Contractual damages]] are limited only by the depraved imagination of your lawyer: [[loss of bargain]], [[loss of opportunity]], [[consequential loss]], [[tax]]es, [[reputational damage]], [[restitution]], [[hedge]]-breakage costs, [[emotional distress]], [[nervous shock]], (needless to say, but inevitably said) legal costs and, if that is not enough, [[aggravated damages]] to compensate for the mental distress of having ones expectations forsaken.<ref>But not [[exemplary damages|''exemplary'' damages]], which are not available at contract, [[as any fule kno]].</ref> Nebulous as they are, such allegations at least require evidence, and the law has developed techniques — [[causation]] and [[remoteness of damage]] — to limit unnecessary excess. | ||
Now any economist will tell you there can be undesirable consequences of commercial activity, that neither party wants, nor can avoid, even if each keeps faithfully to the bargain. For these “externalities” we have [[indemnities]]. They allocate these risks ''away from the person on whom they would naturally fall''. One should therefore approach the request for an indemnity, with caution. Your first question should always be “''why''”: ''Why shouldn't this loss fall on the fellow who would ordinarily bear it?'' | Now any economist will tell you there can be undesirable consequences of commercial activity, that neither party wants, nor can avoid, even if each keeps faithfully to the bargain. For these “externalities” we have [[indemnities]]. They allocate these risks ''away from the person on whom they would naturally fall''. One should therefore approach the request for an indemnity, with caution. Your first question should always be “''why''”: ''Why shouldn't this loss fall on the fellow who would ordinarily bear it?'' | ||