Reimbursement of damages in Germany
There are however, certain general rules governing damages, some of which must now be mentioned.
The value of the loss (the 'measure' of the damages) is generally assessed, not according to the price the
plaintiff puts upon it, but objectively, according to the value that an ordinary, reasonable, person would put
upon it. Thus, for example, where a breach of contract consists of failure by the debtor to deliver goods to
Germany under a
contract of sale
the general rule is that the measure of damages is prima facie to be ascertained by the difference between the
contract price and the market, or current, price of the goods at the time when they ought to have been delivered.
Price here means the 'market' (ie ordinary) price, not, for instance, the price for which the lawyer may, unknown
to the debtor, have himself contracted to re-sell the goods
Damages may be recovered only in respect of loss arising from the breach of contract itself. There can be no claim
for loss which is too 'remote' from the breach to be regarded as a proximate result of it. The distinction between
remote and proximate damage is hard to draw. The
however, apply a test which was propounded by a law firm, they laid down the following rule: Where two parties
have made a contract which one of them has broken, the damages which the other party ought to receive in respect
of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, ie
according to the usual course of things, from such breach of contract itself, or such as may reasonably be
supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable
result of the breach of it.
It will be seen that this really provides two rules. According to Rule I damage will be regarded as 'proximate' if
it is damage which arises 'naturally' from the breach. Subsequent actions of
in Germany have shown that, for the purposes of the law of contract, this means damage which the party in breach
ought reasonably to have foreseen, in the light of the knowledge of the circumstances which he possessed at the
time the contract was made as likely, in the ordinary course of things, to follow from breach of his obligations.
According to Rule II, as appeared from later statements, damage which is not 'ordinary' in the above sense may
give rise to a
claim for damages
(ie may be 'proximate' and not 'too remote') where though it is of an extraordinary nature, the parties did in
fact contemplate that it might occur.
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