Drafting Exclusion of Consequential Damages Clauses.
Hadley v Baxendale (1854) EWHC J70 is a leading English contract law case. It sets the leading rule to determine consequential damages from a breach of contract: a breaching party is liable for all losses that the contracting parties should have foreseen, but is not liable for any losses that the breaching party could not have foreseen on the information available to him.
Consequential damage is included under comprehensive cover and is damage resulting from other damage. For example, if a car’s fan blade breaks off and damages the radiator to such an extent that the engine overheats, the damage to the radiator and engine is consequential damage.
However, His Honour stressed that the natural and ordinary meaning should be interpreted in the context of the contract as a whole and Nettle JA’s formulation in Peerless should not be considered generally applicable. 6 Kenneth Martin J gave the example that profits lost and expenses incurred through breach will sometimes be losses within the normal measure of damages (and not consequential).
Definition of a contract Section 2(h) of CA1950 states that “an agreement enforceable by law is a contrct”. The strongest contract, in terms of enforceability, has an offer, acceptance, consideration for the exchange, clearly sets out the terms of the agreement without ambiguity, and is signed by the involved parties with proper capacity to enter into the contract.
Examples of how to use “consequentialism” in a sentence from the Cambridge Dictionary Labs.
Consequential damages are generally defined as “those damages that are not foreseeable to a stranger to the contact, but are foreseeable to the parties to a contract at the time they signed it, given what they know of the transaction,” according to the article. “But even judges will admit that this definition is difficult to apply in.
A waiver of consequential damages is contained in many construction contracts. The American Institute of Architects (AIA), for example, has included a mutual waiver of consequential damages between the owner and contractor since at least 1997 and continues to do so today.