Law Contracts

TES: SEPTEMBER 20TH, 2023

- Compensation principle not applied duet of lack of foreseeability

HAMID SAID - Doctrine of Remoteness is limit to compensation principle
- Plaintiff sent to defendant, delay led to financial loss
128 Jordyn’s Court - When damage awards being considered, reasonable understanding
Amherstview, Ontario required
K7N 1V5
- Breach of Contract:
1. Liability only incurred in following:
a) Occurring naturally
b) Occurring due to added special circumstance without
communication
c) Singular restatement of a & b: law of diminishing marginal
returns (as probability of loss decreases, the required knowledge
must increase to be able to recover the losses)
- Note: in considering damages, reasonableness test is what is foreseeable as
part of breach (Victoria Laundry v. Newman)
- Foreseeability:
a) Must be determined at the time of contract creation, not after the
breach (able to make compensatory measures)
b) “Reasonably foreseeable” not sufficient in further case (The Heron
II), where restatement is both parties would agree at time of contract
creation, the breach may occur
c) Reasonably foreseeable idea not applicable to every contract, and
must reflect intention of parties
d) Reasonably foreseeable must reflect intention of accepted liability
- Special circumstances discussed at contract signing are considered
naturally occurring if breach happens
- Inordinate loss does not mitigate abiity to conceive of loss (comprehension
must be reasonable, e.g. not able to foresee random market occurrences)
- Reasonable judgement includes common market/societal understanding,
e.g. requiring railway company to make immediate changes to justify
complainant request is not logistically possible (judges indirectly making
policy or interpreting)
- Remuneration/liability is a major consideration, in addition to logistics,
when making judicial decisions (applies to policy as well)
- Note: larger loss = less likely to be implicit when inferences made
- Situations that may be considered too remote:

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Law Contracts

a) Remuneration/liability ratio
b) No knowledge of contract terms affecting liability or damages
- Examples of types of reliance:
a) Known reliance: communicated between parties
b) Detrimental self-reliance: reliance taken on oneself to fulfill
contractual terms
- Court consideration in rulings:
a) In terms of remuneration/liability ratio, court must consider whether
contract stipulates compensation for risk level
b) In consideration of compensation for future liability, the court must
consider intention at time of signing
- Conclusory consideration:
a) Remoteness must be considered in light of factual and policy
consideration

- Factors to Consider in Judicial Decisions

a) Probability of loss: remuneration/liability consideration, contractual
obligation related to Baxley rules, market conditions favouring one
side or the other
Qualitative consideration: how unusual is this breach (e.g. market,
history, cases/precedent)
Probability is weighed as a coefficient (e.g. significance of percent
probability depends on context)
b) Knoweldge (Haxley rules)
c) Relationship of Parties:
Vendor more likely liable than carrier
Relationship factors:
i) Knowledge
ii) Remuneration/Liability
iii) Expectations

d) Commercial context:
Market conditions
Industry

e) Does negotiation or pricing structure suggest liability to either party?

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Law Contracts

Ratio: remuneration (repayment)/liability (amount of loss)

f) Reliance:
Ought parties to have known responsibilities

g) Implicit/Explicit understanding:
What were the terms/intentinos implicit in the contract?

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