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Damages, Remoteness of

Law and Sea.

Damages are the pecuniary recompense given by process of law to a person for the actionable wrong that another has done him. Damages may, on occasion, be awarded where the plaintiff has suffered no ascertainable damage: damage may be presumed.

Damages in contract and in tort
Last updated: 28-Nov-2015

Per Lord Reid in Koufos v C Czarnikow Ltd (The Heron II), [1967] 3 All ER 686 at p.692:

The modern rule in tort is quite different and it imposes a much wider liability.

The defendant will be liable for any type of damage which is reasonably foreseeable as liable to happen even in the most unusual case, unless the risk is so small that a reasonable man would in the whole circumstances feel justified in neglecting it; and there is good reason for the difference. In contract, if one party wishes to protect himself against a risk which to the other party would appear unusual, he can direct the other party’s attention to it before the contract is made, and I need not stop to consider in what circumstances the other party will then be held to have accepted responsibility in that event. In tort, however, there is no opportunity for the injured party to protect himself in that way, and the tortfeasor cannot reasonably complain if he has to pay for some very unusual but nevertheless foreseeable damage which results from his wrongdoing. I have no doubt that today a tortfeasor would be held liable for a type of damage as unlikely as was the stoppage of Hadley’s Mill for lack of a crank shaft: to any one with the knowledge the carrier had that may have seemed unlikely, but the chance of it happening would have been seen to be far from negligible. But it does not at all follow that Hadley v Baxendale would today be differently decided.

And by Lord Hodson at p.708:

True that where the facts are the same in two cases the damages will no doubt be the same whether the claim is made in contract or in tort; …

The approach in tort will, however, normally be different simply because the relationship of the parties is different. The claim against the tortfeasor who has inflicted tortious damage is not the same as the claim against an opposite party for breach of contract, for the latter claim depends on the contemplation of the parties to the contract and questions of remoteness as such do not arise. Consequently liability in tort may often be of a wider kind.

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