Browsing by Author "Diamond, Alma"

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    Remoteness and the limitation of contractual damages
    (Stellenbosch : Stellenbosch University, 2016-12-07) Diamond, Alma; Myburgh, Franziska; Du Plessis, Jacques; Stellenbosch University. Faculty of Law. Dept. of Private Law.
    ENGLISH ABSTRACT : This study explores remoteness of contractual damages in South African law. The manner in which South African contract law limits the extent of a plaintiff's recovery of damages caused by breach is controversial. Criticism has been expressed about, inter alia, the distinction between general and special damages, the convention requirement imposed for the recovery of special damages, and the approach of determining remoteness at the time of contracting and not of breach. It is expected that the current approach will be revised when the opportunity arises. In light of the debate around the current South African approach, and the need for its development, this study provides a detailed overview of the premise, purpose and operation of rules of remoteness. The study commences with a historical overview of the early civil and common law approaches to remoteness and their subsequent development in France, Germany and England. Against that background, the development of the South African approach is discussed and the various sources relied upon by South African courts placed in context. The study then considers three different theories of remoteness: the direct consequences theory, the adequate cause theory, and the foreseeability theory. The direct consequences theory is discussed in the context of English law. The discussion highlights the necessity for the remoteness inquiry to take account of the facts of a particular case. The adequate cause theory, in turn, is explored in the context of German law. The theory's development into a discretionary, policy-based approach to remoteness is discussed with reference to the adoption of the Schutzzwecklehre. The foreseeability theory is explored in two contexts: its application in English law and under the model instruments. The overview of English law shows that a distinction between general and special damages is often unhelpful and even detrimental to the remoteness inquiry. The recent move in English law toward an agreement-centred approach to remoteness is also evaluated with reference to the South African convention principle. Finally, foreseeability as applied in the model instruments is evaluated. It is concluded that the flexible approach to the foreseeability theory seen in the model instruments addresses many of the identified limitations of traditional foreseeability tests. The study suggests that the remoteness inquiry should focus on a discovery of what parties could reasonably have taken into account when contracting. For this reason, it is recommended that remoteness be determined with reference to the time of contract conclusion; and that it should not depend upon the parties' intentions or agreement about liability for damages. Additionally, the study finds that the foreseeability inquiry cannot draw a rigid distinction between the nature and extent of a loss. Ultimately, it is suggested that a flexible approach to foreseeability would resolve many of the limitations of the current South African approach. Such an approach would align the remoteness inquiry to notions of fairness and economic efficiency, as well as the constitutional value of human dignity.