ExpertMedium2 marksMultiple Choice
ACCA · Question 08 · Corporate and Business Law
Which TWO of the following statements accurately reflect the rules on remoteness of damage in contract law, as established in Hadley v Baxendale?
Which TWO of the following statements accurately reflect the rules on remoteness of damage in contract law, as established in Hadley v Baxendale?
Answer options:
A.
Losses that arise naturally from the breach in the usual course of things are recoverable.
B.
The claimant must prove that the defendant intended to cause the specific loss.
C.
Unusual or special losses are only recoverable if they were reasonably in the contemplation of both parties at the time the contract was made.
D.
Damages are designed to punish the party in breach for their failure to perform.
How to approach this question
Recall the two limbs of the test for remoteness of damage in contract law from Hadley v Baxendale.
Full Answer
The rule in Hadley v Baxendale establishes two limbs for remoteness of damage in contract: 1) Normal loss: losses arising naturally from the breach are recoverable. 2) Special loss: unusual losses are only recoverable if the special circumstances were communicated to the defendant and were in the reasonable contemplation of both parties at the time of contracting.
Common mistakes
Selecting options related to tortious remoteness (Wagon Mound) or punitive damages.
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