Do you find any variance in judicial approach when it comes to assessing the degree of remoteness of damages in respect of contractual liability and liability under Law of Torts?

The term remoteness of damages is used in law to refer to the legal test that is used to distinguish which losses suffered due to an act may be applicable for compensation by the doer of such act.

In Contract Law, a general principle is followed to assess which damage is too remote for compensation, and which may be rightly compensated. Where two parties enter into a contract, and one of them breaches it, the damages that the other party should be entitled to receive in respect of such breach of contract should be deemed to have arisen naturally, fairly, and reasonably, i.e. in the ordinary course of things, from the contractual breach itself, or that which might reasonably be presumed to have arisen in the contemplation of the contract.

Also Read Remoteness of Damages

Also Read Determining the amount of compensation/damages for personal injuries

Parties may include explicit provisions in their contract regarding the assessment of damages. If they do not, the law applies the test in the form of rules on remoteness, which specify the extent of responsibility implicitly assumed by the promisor. This general principle requires the plaintiff to think about the likelihood of the specific loss more than the corresponding general principle in tort.

In the law of tort, there are many views, or tests, of remoteness of damage. According to the test of foreseeability, the damage is too remote for compensation, if a reasonable man would not have foreseen them. The test of directness states that any damage that is not a direct result of the tortious act is too remote and thus not liable for compensation.

Also Read Damages for Nervous or mental shock

Also Read Rule of Novus Actus Interveniens

When an intentional tort is committed, it is considered that all consequences of such act, foreseeable or not, are covered by the liability for such act. The maxim of Novus actusinterviens refers to an act that snaps the chain of causation set in motion by the tort-feasor’s act, after which any damage is too remote for the tort feasor to be held liable. It is an intervening act, which can be a human action or natural event.

However, it must be realized that a claimant suing for tort cannot sue for a damage which he could have avoided by taking a reasonable step. A defendant is only liable for such part of the plaintiff’s loss as is properly, to be regarded as caused by the defendant’s breach of duty, and not that which the plaintiff could have avoided by acting reasonably.

Also Read Discharge of Torts in India

In tort law, we have seen that reasonable foreseeability is a test of remoteness; however, in contract law, a much higher level of foreseeability is required, i.e., a serious possibility or real damages that the loss will occur. As a result, damages in contract are more limited than damages in tort law.

This distinction is justified for two reasons: first, it is possible for the claimant to impose a greater liability for loss arising from special circumstances by communicating these at the time of contract formation; and second, such communication enables the party in breach to take measures to protect himself from any such loss, which may be in agreement with the plaintiff, by raising the price or incorporating protective terms in the contract.

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