ACCA LW · Chapter 4 · Question 2 of 10
Under the first limb of the rule in Hadley v Baxendale, which losses are recoverable for breach of contract?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Losses arising naturally, according to the usual course of things, from the breach
Explanation
Hadley v Baxendale allows recovery of losses that arise naturally from the breach (first limb) and losses which may reasonably be supposed to have been in the contemplation of both parties at the time of contracting as the probable result of breach (second limb), usually because of special knowledge. Losses outside these limbs are too remote. Liability does not depend on intention or on losses being listed in the contract.
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