E according to the usual course of things from such

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Unformatted text preview: se as the present is this: - W here 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 m a y fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as m a y 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. N o w , if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus k n o w n to both parties, the damages resulting from the breach of such a contract, w hich they would reasonably contemplate, w ould be the amount of injury w hich would ordinarily follow from a breach of contract under these special circumstances so known and communicated.83 81 (1854) 9 E xch. 3 41; 156 E.R. 145. Overseas Tanks hips (UK) Ltd. v Morts Dock & Engineering Co. Ltd. (The Wagon Mound) (No. 1) (1961) A .C. 3 88. In the United States, w here this issue has been considered by the courts, the leading case is still the 1931 case of Ultramares v Touche w here Cardozo J. noted that if [unlimited] liability were to exist for negligence, then it would "expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class". Although this dictum m a y be criticised as a slippery slope fallacy, it portrays the essential fears of the courts in delimiting the scope of recovery completely. See 255 N .Y. 170 at 179. Bryan v Moloney (unreported) F.C. 95/011; Perre v Apand Pty. Ltd. (unreported) [1999] 82 HCA 36. 83 (1854) 9 E xch 3 41; 156 E.R. 145 at 151. 224 Hadley v Baxendale has been the starting point of the assessment of damages in English and Australian Courts from 1854 to the present day. Damages recoverable under the two limbs of the rule illustrated in that case are said to be 1) damages arising from the "us course of things" and 2) damages which are contemplated in specific knowledge given between the parties. The quantification issue, to the courts, is a logically secondary consideration which must be scrutinised after the court has ascertained the factual limit which it will hold the defendant accountable. The court takes a pragmatic perspective when starting upon this exercise. Lord Wright argued that: [t]he law cannot take account of everything that follows a wrongful act; it regards some subsequent matters as outside the scope of its selection, because "it were infinite for the law to . judge the cause of causes," or consequences of consequences. . . In the varied w e b of affairs, the law must abstract some consequences as relevant, not perhaps on grounds of pure logic but simply for practical reasons.84 Remoteness, therefore, is the limit, beyond which the court will not hold the defendant liable for losses incurred, regardless of whether or not they are conceptually attributed the defendant's actions. The relationship of the parties prior to the culpable act will dictate the generic limits of damages which the court will assign to a party to be borne post facto from a culpable action. Remoteness: is directed to the relationship between the parties insofar as it is relevant to the allegedly negligent act of one person and the resulting injury sustained by another. It involves the notion of nearness of closeness and embraces physical proximity (in the case of space and time) between the person or property of the defendant, circumstantial proximity such as overriding relationships of employer and employee or of a professional m a n and his client and causal proximity in the sense of the closeness o f directness o f the relationship between the particular act or cause of action a nd the injury sustained... The identity and relative importance of the considerations relevant to an issue of proximity will obviously vary in different classes of case a nd the question whether the relationship is 'so' close 'that' the c o m m o n law should recognise a duty of care in a n e w area of 84 Liesbosch Dredger v Edison S.S. (Owners) [1933] A .C. 4 49 at 4 60 per Lord Wright. 225 class of case is, as Lord Atkin foresaw, likely to be 'difficult' of resolution in that i m ay involve t value judgments on matters of policy and degree.85 Whether in tort or contract, the court will look to establish limitations, therefore, upon the award which will be given to the plaintiff. Both in contract, and in tort, the court will seek the limit beyond which it will not hold the defendant responsible. This goes to the issue of causation and, in tort at least, a theory of unity has been advanced, which "demonstrate[s] that the ostensibly separate inquiries into duty of care, breach of duty, and remoteness of damage (including causation) are aspects of a single inquiry into reasonable conduct." Contrasting contract with tort, there is also the additional consideration that the contractors can provide for breach, in essence making their...
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This note was uploaded on 09/03/2012 for the course LAW 1501 taught by Professor Garva during the Three '12 term at University of Adelaide.

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