Compensatory damages
Audio titled: Audio recording 27.3

Remoteness is a really interesting topic and it's very difficult in contract law, which raises all sorts of questions. But I think it's important to remember that the starting point of your analysis is still Hadley v Baxendale, and the two limbs that you have to examine. First of all, where their losses were naturally flowing from the breach, in which case it's assumed that they were foreseeable, or whether they were unusual losses that wouldn't ordinarily occur from the breach of contract, but where in the reasonable contemplation of the parties at the time the contract was made. I think it's important to emphasize the test is at the time the contract was made, because at that point the contracting parties can say, well, I don't want to contract on this basis, or I want to insert an exclusion clause, or a limitation clause, or I want more money if I might be on the hook for such a large amount in the event of breach. Clearly there were difficulties within the doctrine, but the biggest challenge, if you like, to the Hadley v Baxendaleorthodoxy has come from the judgments of Lord Hoffman and Lord Hope in The Achilleas Which is analysed in some detail in the chapter. But I think The Achilleasonly really applies in unusual sorts of situations in the sense that, do you really think a party's assumed responsibility for a type of loss comes in only in unusual circumstances. And I would not jump straight to The Achilleasin your analysis of this area. I think it is important to start with Hadley v Baxendale, and often that will be all you need. And a recent illustration of that is the recent decision of the privy council in Attorney General of the Virgin islands v Global Water Associates td, which is again, dealt with in this section of the book. It's an unusual sort of case and it's worth sort of hanging around to say it's an unusual sort of case, because it's an appeal that doesn't really raise an issue of law at all, it's an appeal on the facts. But the privy council is an unusual final court because you're entitled to appeal as of right to the privy council from certain jurisdictions. And that's what happens in this case. So, well, Lord Hodges advice on the privy council is helpful, but wasn't through the contested issue of law. But I think it is still interesting what he says about Hadley v Baxendale, it's a helpful summary of the principles. And importantly, there's no need for the privy council to go beyond Hadley v Baxendale to resolve the dispute in question.

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