Causation, remoteness, and mitigation

Question 1

What do the three things aim to do?

Answer 1

• Limit damages

Question 2

What happens in regards to damages if causation, remoteness and mitigation cannot be proves?

Answer 2

• Damages will be nominal

Question 3

what does remoteness of damage mean?

Answer 3

• That the damage was reasonably foreseeable for D to be held accountable otherwise it would be too remote

Question 4

Give an example of someone mitigating their loss

Answer 4

• D was meant to deliver a car to C
• C could walk, borrow a car of a friend, get a taxi, busses etc
• Not mitigating would be where she stays at home and refuses to go to work loosing more money in wages

Question 5

What happens when a C unreasonably fails to mitigate?

Answer 5

• They will not receive damages to cover that loss

Question 6

What approach do the courts take in using causation?

Answer 6

• The common sense approach in using the ‘but for’ test

Question 7

What is a multiple sufficient cause with regards to causation?

Answer 7

• Where something/another event would have been sufficient to cause the loss even w/out the breach
• Causation will still be satisfied if the breach would have been sufficient to cause the loss even w/out the other event.

Question 8

What is the law on intervening acts in relation to causation?

Answer 8

• If the D’s breach was the proximate cause then damages would still be liable as the chain of causation remains unbroken

Question 9

Monarch Steamship v. Karlshamns [1949]

Answer 9

• C chartered ship from D to carry cargo to X, who was purchasing from C
• In breach, vessel not seaworthy, so delay in completing voyage
• During delay, WWII broke out
• Ship could not reach destination
• C would not have suffered any loss but for outbreak of WWII, because ship would have been repaired and the delivery made in time, even after D’s breach
• However, nor would C have been in breach to X if D had not breached, because delivery would have been completed before WWII broke out
• D’s breach remained effective cause of loss
• Because, at the time the contract was made it was reasonably foreseeable that war might break out and prevent delivery to Sweden in the event of delay by D

Question 10

Which case demonstrates that as long as D’s actions are the proximate cause, intervening acts (as long as they are not too remote and therefore reasonably foreseeable) will not break the chain of causation?

Answer 10

• Monarch Steamship v. Karlshamns [1949]

Question 11

When is D liable for all loss caused by her breach in respect of remoteness of damage?

Answer 11

• if D knew or ought to have known, at the time of contracting, that that type of loss was likely to result if D committed such a breach.

Question 12

What is an advantage of using remoteness of damage?

Answer 12

• Floodgates argument
• if D could be liable for all loss caused by her breach, no matter how remote, liability could extend to unmanageable limits.

Question 13

Hadley v. Baxendale (1854)

Answer 13

• Iron shaft necessary to run C’s mill broke and D contracted w/C to deliver shaft to X, to be used as guide for manufacture of replacement
• In breach, D delayed delivery to X
• C unable to run mill w/out the shaft, so lost profits
• Court held C not entitled to recover lost profits
• It was not reasonably foreseeable to D at the time of conclusion (i.e., making) of contract that delay would cause such loss
• D had no reason to know that mill would be completely shut down until C received a new shaft

Question 14

Which case demonstrates that if the damage caused was too remote and therefore not reasonably foreseeable D can not be held accountable for all the loss suffered by C?

Answer 14

• Hadley v. Baxendale (1854)

Question 15

Which case demonstrates that if the damage caused was reasonably foreseeable D can be held accountable for all the loss suffered by C?

Answer 15

• Victoria Laundry v. Newman [1949]

Question 16

Victoria Laundry v. Newman [1949]

Answer 16

• C contracted w/D to purchase boiler for use in laundry business
• In breach, D delayed delivery
• C lost business as a result
• D knew C wanted boiler for immediate use in business
• CA, therefore, held D liable for C’s loss of profit resulting from its inability to perform those parts of its business for which the boiler was required
• D knew of purpose of C’s purchase of boiler, and loss of profit was ‘reasonably foreseeable as [likely] to result from the breach’

Question 17

What is the issue with the idea of remoteness of damage?

Answer 17

• What is reasonably foreseeable?

- How much is reasonably foreseeable

Question 18

Which case demonstrated an objective acceptance of foreseeable of risk?

Answer 18

• The Achilleas [2008]

- Provides a kind of assumption of responsibility in some cases where the objective person would foresee something

Question 19

Which case demonstrates that C should do everything in their power to mitigate loss whether that be to reduce it or simply not increase it?

Answer 19

• British Westinghouse v. Underground Electric [1912]
• ‘[The law] imposes on [C] the duty of taking all reasonable steps to mitigate the loss consequent on the breach, and debars him from claiming any part of the damage which is due to his neglect to take such steps…[T]his…does not impose on [C] an obligation to take any step which a reasonable and prudent man would not ordinarily take.’

Question 20

Which case demonstrates that C does not have to mitigate in order to reduce the loss she just simply has to take all reasonable steps to mitigate?

Answer 20

• Pilkington v. Wood [1953]

Question 21

What are the three simple steps to note when considering mitigation of loss by the C?

Answer 21

1- C does not have to reduce loss but simply has to take reasonable steps in mitigating
2- D has to prove that C was not reasonable in mitigating loss
3- If C unreasonably fails to mitigate, she is not barred from recovering damages she merely cannot claim damages to the extent that she unreasonably failed to mitigate