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Contract: Remedies

Causation and remoteness of damage

  • 3 things to know
  • A2 Units 3 and 4

Overview

Recall questions on an intervening act, the two limbs in Hadley v Baxendale, the lost profits in Victoria Laundry, The Achilleas, and when a party's knowledge is assessed.

What you need to know

Answer each one before you reveal it.

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Key term

Why did the claim fail on causation in Quinn v Burch Bros (Builders) (1966)?

Key term

How does an intervening act affect a claim for breach of contract?

Key term

State the two limbs of the remoteness rule in Hadley v Baxendale (1854).

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What must a claimant prove about causation in a contract claim?

    Model answer

    The claimant must show that the breach was the effective or dominant cause of the loss, not merely an event without which the loss would not have occurred.

  2. 2

    Why did the claim fail on causation in Quinn v Burch Bros (Builders) (1966)?

    Model answer

    The contractors failed to supply a stepladder, but the plasterer's own decision to use an unfooted trestle was the effective cause of his injury, so the breach did not cause the loss.

  3. 3

    How does an intervening act affect a claim for breach of contract?

    Model answer

    An unreasonable act by the claimant or a third party may break the chain of causation, so the defendant is not liable for loss flowing from that act rather than from the breach.

  4. 4

    State the two limbs of the remoteness rule in Hadley v Baxendale (1854).

    Model answer

    The claimant may recover loss arising naturally from the breach according to the usual course of things, and loss which both parties could reasonably have contemplated at the time of contracting as the probable result of a breach.

  5. 5

    Why did the mill owners recover nothing for lost profits in Hadley v Baxendale (1854)?

    Model answer

    The carriers were not told that the mill would stand idle without the broken crankshaft, and since a mill would usually have a spare the loss of profit did not arise naturally and was not within their contemplation.

  6. 6

    What did Victoria Laundry v Newman Industries (1949) allow the laundry to recover?

    Model answer

    The laundry recovered the ordinary profits lost through the delayed delivery of the boiler, because the engineers knew it was needed for immediate use in the business.

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Pecuniary loss is financial and measurable.
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