Principles that can limit the damages awarded following a breach

Question 1

what is an intervening act

Answer 1

• third party someone that breaks the chain of causation
  loss claimed must be caused by breach and intervening act can break the chain of causation

Question 2

need for remoteness principle

Answer 2

can’t be too remote.
- remoteness- when the contract was entered, the occurance of a loss from the breach is too unlikely
reflects the risk of loss that appeared to be accepted at the time entering the contract

Question 3

what is the basic remoteness test

Answer 3

reasonable contemplation of parties at the time of entering contract
- loss will be contmemplated if
1. where the loss arises naturally from the contract being breached (obvious as a possibility)
2. any special loss was communicate to the other party meaning it was brought to their contemplation

Question 4

how is a loss ‘contemplated’

Answer 4

• loss will be contmemplated if
  1. where the loss arises naturally from the contract being breached (obvious as a possibility)
  2. any special loss was communicate to the other party meaning it was brought to their contemplation

Question 5

heron II

Answer 5

at the time of the contact the loss from a potential breach must have been objectively contemplated as quite likely or not likely.

Question 6

is there a different remoteness test for physical loss

Answer 6

only the type of loss has to be objectively foreseen as quite likely, severity of loss does not have to be foreseen.

Question 7

what is mitigation

Answer 7

• failure to take reasonable steps to prevent the loss
• loss must not be unreasonably increased

Question 8

Hadley v baxendale

Answer 8

the traditional authority for the basic remoteness rule.

Question 9

Victoria laundry v newman industries

Answer 9

reasonably foreseeable losses