Recoverable Contract Damages from a breach, the rule of Remoteness

19 May 2022 in Building and Construction Law, Civil and Commercial Litigation and Law, Commercial Lawyers, Contract Lawyers, Dispute Resolution Law

In a contract, damages flowing from a breach must not be remote.  This principle has been defined in the well known case of Hadley v Baxendale.

The basic principles of contract damages are

1. Every breach generates a right to damages;
2. but must prove loss; and
3. Loss must be caused by breach; and
4. Loss must not be too remote.

Remoteness

The rule in Hadley v Baxendale

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, ie, according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.

The business and construction lawyers at Brander Smith McKnight have extensive experience in drafting contracts to mitigate against possible future problems and are experts in dealing with contract breaches and associated damages.  They will advocate for you, representing you in all aspects of negotiation and if required litigation.

Brander Smith McKnight Lawyers are conveniently located in Sutherland, Parramatta, Wollongong and Sydney CBD.