Business Case Problem: Consequential Damages EssayPlace Your Order Now
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Business Case Problem: Consequential Damages Paper
Business Case Problem: Consequential Damages Assignment
Also referred to as special damages, consequential damages ‘’are foreseeable damages that result from a party’s breach of contract'' (Miller & Hollowell 223). According to Miller and Hollowell, for a party recover consequential damages, the party in breach of the contract must have known or have reason to know that special circumstances beyond the contract itself will cause the innocent party to suffer additional indirect loss (223). Such losses include as inconvenience, loss of profits, loss of value of property, or loss of time.
Hence, in this particular scenario, assuming that Simard is liable for consequential damages, the extent of his liability would be the real value of the property, that is, $192,000 plus any additional profits or interests that may have accrued on the property or any profit that the owner of the property would have obtained had Simard not defaulted on payments. He is only liable to the extent reasonably foreseeable to both parties. Simard is also liable for losses and expenses related to the first resale if it can be shown that he knew that such a loss would result or reasonably ought to have known that by defaulting on payment, the owner of the property would be forced to sell the property at a loss.
For, the general rule for consequential damages as stated in Hadley v. Baxendale (1854) is that liability for such damages only lies where the breach of contract may reasonably and fairly be said to have arisen either naturally according to the usual course of things or as the parties may reasonably have contemplated when entering into the contract. Also, as the court held in Burson v. Simard (2012), for liability for consequential damages to exist, unless there are special circumstances, a purchaser of property who defaults on payments is only liable for the first resale that results from their default and not subsequent losses that are not reasonably foreseeable. ...............GET AN AFFORDABLE PLAGIARISM FREE COPY