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What principle did the English Court of Exchequer articulate in Hadley v. Baxendale (1854)?

Hadley v. Baxendale set out two routes to recovery for breach. The loss may arise naturally in the ordinary course, or it may be the kind both parties could reasonably…

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What principle did the English Court of Exchequer articulate in Hadley v. Baxendale (1854)?

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Correct answer B

Hadley v. Baxendale set out two routes to recovery for breach. The loss may arise naturally in the ordinary course, or it may be the kind both parties could reasonably contemplate as a probable consequence when they made the contract.

Option feedback

Option A

Causation by itself does not make a remote loss recoverable.

Option B

This captures the ordinary-course and reasonable-contemplation limbs.

Option C

The ordinary-course formulation omits losses within both parties’ reasonable contemplation at formation.

Option D

The contemplation limb is assessed when the parties make the contract.

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