Research On The Foreseeability Rule Of Damages For Breach Of Contract

Law of Contract in China uses the foreseeability rule as the basic rule for the limitation of damages for breach of contract.Regarding the justification of the rule and specific elements(such as foreseeing subject,foreseeing time,and foreseeing content,etc.),there are many theoretical arguments and chaotic judicial practice.The first part of this article first states that the essence of the foreseeability rule is legal causality and its application considers legal policies and value judgment.Secondly,this article evaluates three theories of the foreseeability rule one by one and concludes that the justification of the foreseeability rule is that it reflects the normatively evaluated agreement of the parties to the contract.Finally,by analyzing the timing and standards in applying the adequate causation theory,and meanings of subject scope,interest scope,ways scope damages occurred in applying the contract purpose theory,this article concludes that the adequate causation theory may not be effective in limiting liability for breach of contract and the contract purpose theory is not superior to the foreseeability rule.The second part of this article first make a point that foresight is based on certain facts and information,and then analyze their effects on the judgment of foresight of contract terms,information obtained from the contracting party,and objective knowledge of the breaching party.Secondly,this article analyzes the foresight standard by comparing the comparative law and China's judicial practice,and thendraws the conclusion that in order to judge whether the loss can be foreseen in China,we should base on the objective standard,and emphasize the special facts.Finally,this article analyzes the shortcomings and advantages of contracting time,and concludes that the contracting time should generally be taken as the foreseeing point,and when intentional or gross negligence breach,it can be adjusted to the breaching time.In the third part,this article analyzes what should be foreseen.Firstly,this article makes a point that the possibility of the damages determines the degree of certainty that the breaching party foresees.After referring to CISG and PICC,this article concludes that the "possibility" should be understood as "very likely".Secondly,this article analyzes the foreseeability judgment of non-performance damages,incidental damages,consequential damages,and lost benefits,and thinks that: non-performance damages is generally foreseeable because it is related to expectation benefit;incidental damages is generally foreseeable,but the breaching party can only reasonably foresee the amount of damages caused by reasonable measures;the breaching party's foreseeability of the consequential damages depends on whether it knows some special facts,in the case where the obeying party need to be liable to a third party,the degree of difference in the terms of liability in the contract between the contracting party and the breaching party and the contract between the contracting party and the third party will affect the judgment of foreseeability.Foresight on resale losses and business losses depends on whether the breaching party is aware of the special circumstances,and the identity of the parties and the contract price also affect the foresight judgment.Finally,combining view of commentary on CISG and essence of the foreseeability rule,this article thinks that the breaching party should at least foresee the possible scope of damages.The last part of this article deals with the burden of proof of the foreseeability rule.The foreseeability rule is based on normatively evaluated agreement and if the victim wants compensation,he must prove that the loss is included in the scope of contract benefits.