The Foreseeability Rule For Damages In Breach Of Contract

The paper does a preliminary research on the foreseeability rule for damages in breach of contract. It is divided into five chapters. The first chapter compares the foreseeabillity rule of several countries'relevant laws.The foreseeability rule was from France. It was first talked about by Pothier in his On Debt Law and was formally established in French Civil Code. The Anglo-American law made it flourish. The rule was known in the famous British case——Hadley v.Baxendale(1854),so it is also called"Hadley Rule".It was devised and developed in the subsequent Victoria Laundry(1949), HeronⅡand Parsons Livestock(1978). No foreseeabillity theory exists in German law and adequate causation theory is a substitute for forseeability. Both have the same aspect and some differences. The rule is also recognized in international law, eg. International Commerce Contract Rule, International Merchandise Sales Contract Convention, European Contract Rule. Through the contrast analysis of some countries 'laws,we can have a perceptual knowledge. The second chapter tries to make a research on theoritical basis of foreseeability, that is to say why foreseeability rule is such. Different historical factors and different views on foreseeabillity cause its theoritical basis different. There is meaning theory, policy theory, causation theory in the continent law, and there is fairness theory, fairness and efficiency theory,socity need theory(similar to French policy theory) in Anglo-American law. In our country some scholars have raised the theory of balancing of interest and the theory of good faith. The theories have some reasonableness and contribute to better know foreseeability rule from more aspects. But they cannot cross from beginning to end as theory basis, and reflect only in foreseeability rule. Therefore, the paper thinks the policy theory is theory basis of foreseeability. The policy rule has very broad meaning, including fairness rule, efficiency rule and faith rule. The policy theory from America is a mechanisim authorizing the court discret of judgement and following several mature formations.There is the concept about public order and good customs in Chinese civil law.Though the scope of the concept is smaller than public policy,they are almost the same in substance. Chinese legal system pays attention to the policy and we tend to depend on the flexiblility of the policy to settle questions. The third chapter describes the application of foreseeability rule from four aspects. The first aspect makes theory analysis of foreseeability from agent of foreseeability, time of foreseeability, content of foreseeability.It thinks that the agent of foreseeability should be the agent of contract of breach not both. Time of foreseeability should be time of establishing contract, and as to new conditions which comes to be known by both in the future, both can resolve the question by changing the contract. Content of foreseeability should be the type of damage not including the scope and the extent of damage. The second aspect talks about the elements of influencing foreseeability.First,it is talked about the parties ,character of the plaintiff and character of the defendant and the ability of foreseeability .The paper thinks the combined tests subject and object about the ability of foreseeability should be adopted.The object test for a reasonable person 's judgement is the main one,and the subject test is complement. The third aspect talks to the foreseeability rule limiting the party who has broken the contract in the reasonable scope.The Amerian law limits the application of the foreseeability.But the author thinks the limitation is mainly equity to rights and duties between the contract parties.The fourth aspect talks to liminations and exceptions to foreseeability, that is to say foreseeability is unsitable for intentional or important negligence breach of contract and fraud. The fourth chapter describes the connection between the foreseeability rule with causation.Some countries have different regulations about the connection the foreseeability rule and causation .German law and Austrian law deny the connection the foreseeability rule and causation.French law which confuse the foreseeability and the direct decides whether damage is caused by the breach of contract. American contract thinks that the only test for judging causation is the foreseeability which means that the action belonging to factual cause is the proximate cause if the damage of the action is within the scope of foreseeability.The paper thinks the foreseeability rule has the following two functions :limiting the liability scope of the the party of the breach of contract and the test of judgement for causation. The foreseeability rule is a tool for cutting off the chain of causation. The fifth chapter raises suggestions and improvment to legislation and judicial practice of our country on the above anylasis. The reasonable foreseeability rule of our country is most early seen in 19th article of Economy Contract Law Involving Foreign Affairs, in the 2ed regulation 17th article of Technology Contract Law and later in the 113th article of Contract Law. And, the following is also connected in the 17th article of Railway Law and the 49th...