The rule in Hadley v Baxendale relates to which legal concept in contract law?

Answer options:

Mitigation of loss.

Remoteness of damage.

Specific performance.

Frustration of contract.

How to approach this question

Link the famous case name to its legal principle. Hadley v Baxendale is the foundational case for deciding which damages are too far removed from the breach.

Full Answer

B.Remoteness of damage.✓ Correct

The case of Hadley v Baxendale established the rules for remoteness of damage in contract law. It dictates that damages can only be recovered if they arise naturally from the breach (limb 1) or were reasonably in the contemplation of both parties at the time the contract was made (limb 2).

Common mistakes

Confusing remoteness with mitigation or the measure of damages.

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Practice the full ACCA LW — Corporate and Business Law Practice Exam 2

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