Date: Thu, 10 Feb 2005 09:49:30

From: Adam Kramer

Subject: Remoteness

Dear all,

I too am a Pothier man (and he took it from Molinaeus). It seems to me to all rest on implied agreement, the old British Columbia and Vancouver’s Island Spar, Lumber, and Saw-Mill Co. v Nettleship (1868), L.R. 3 C.P. 499 view with a few glosses. Despite a fashionable skepticism about implying things (that I think is misguided as it stems from failure to recognise that we can, in a real sense, intend things that never crossed our minds), we have become quite sophisticated at interpreting contracts, so why don't we use those skills to work out what scope of responsibility has been impliedly accepted? For me it depends upon lots of (shared) knowledge and assumptions about how standardised the product/service was, the factors that are likely to have gone into pricing (such as insurance), and a bunch of other factors. They must be shared, so such factors will necessarily be vague as most parties don't know much about other parties' business.

Bizarre questions like 'must it be foreseeable as not unlikely or as a serious possibility' are meaningless as all depends upon how the 'it' is defined (a point almost made in the Jackson case), and the real question depends upon what one would normally assume about the scope of the duty undertaken. Anyway, I investigate and put these views in a piece that is published now or very soon: 'An Agreement-Centred Approach to Remoteness and Contract Damages' in N. Cohen and E. McKendrick, Comparative Remedies for Breach of Contract (Oxford: Hart, 2005). The piece is also at http://www.kramer.me.uk/adam/research.htm.

Adam Kramer

-----Original Message-----
Sent: 09 February 2005 18:34
To: Robert Stevens
Subject: Re: ODG: Remoteness

Dear Colleagues:

I guess I am partial to the Pothier view (as described by Robert) since I see contract as an agreed upon transfer of one's entitlement to another. Since it is a consensual two-sided exchange one has to examine the terms of the agreement made between the parties. What H v B seems to say is that one is entitled to the thing promised and the ordinary use of the thing since knowledge of these are shared between the parties and must form the basis of the exchange. In my mind, therefore, the rule is not so much a bargaining over damages but rather over shared use. If you have a use that is subjective and not shared then it is not really part of the exchange and therefore not compensable. In order to make it part of the two-sided exchange, the information of the special use must be communicated and accepted by the other side. Thus, a collateral benefit is that the rule encourages disclosure of the risk of harm but this is not its purpose -- rather its purpose is to make concrete the two-sided exchange nature of contract.

After the ordinary/special aspect and the timing aspect of the contract remoteness rule are taken into account, I am not sure that there is much difference between the reasonably foreseeable requirement of tort and the reasonable contemplation requirement of contract (despite the views of Lord Reid, who I do not really think understood the reasonable part of reasonable foreseeability).

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