Understanding Contractual Remoteness

Speaker: Associate Professor David Winterton, Hong Kong University

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What is the nature and content of the restriction on the recovery of contractual damages commonly referred to as remoteness’?  Invoking Hadley v Baxendale, and subsequent cases, it is conventionally said that damages for breach of contract are recoverable when the relevant ‘loss’ was of the ‘kind’ that was within the parties’ reasonable contemplation at contract formation. But the extent to which such an approach is either doctrinally accurate or normatively justifiable are both strongly disputable. These difficulties have spawned various alternative ‘agreement-centred’ accounts of contractual remoteness. But such accounts have also been subjected to forceful critique. The central ambition of the present article is to salvage the ‘agreement-centred’ account of contractual remoteness; in particular, by exposing the two central mistakes that have undermined previous attempts to explain the law. The first is the failure to fully appreciate the legal significance of the wholly objective nature of contractual agreements. The second is the failure to appreciate that it is the imposition rather than the restriction of liability for consequential loss that needs to be justified. Once these errors are appreciated, the existence (and content) of a non-causal limit on the recovery of damages for consequential loss becomes relatively obvious, and it is explained how such an account is generally consistent with the law as we find it.

About the Speaker:  

David Winterton is an associate professor at the University of Hong Kong, having previously  worked at the University of Sydney. His research and teaching focus is on commercial law and the law of obligations. He has worked in practice at major law firms both in Sydney and New York and continues to work with practitioners where this is possible and mutually beneficial, being an admitted legal practitioner in NSW (2006) and an Attorney in New York (2012). He completed his doctoral thesis at the University of Oxford, on the law governing the quantification of damages awards for breach of contract. He is the author, amongst any other publications, of Money Awards in Contract Law (Hart, 2017).

Dr Winterton's Biography and publications