Question

The Hadley case limited damages to damages that were foreseeable at the time of the formation of the contract. Suppose we eliminate this limitation and allow all damages caused in whole or part by the contract breach. What positive or negative economic consequences would follow?

Answer 1

Eliminating the limitation on damages in the Hadley case could have both positive and negative economic consequences.

Step-by-step explanation:

If the limitation on damages in the Hadley case was eliminated, allowing all damages caused by a contract breach, both positive and negative economic consequences would follow. One positive consequence is that it would incentivize parties to carefully consider the potential harm caused by a breach when entering into a contract, leading to more cautious decision-making. On the other hand, a negative consequence would be an increase in litigation and costs associated with breached contracts, as parties could seek extensive damages for any harm caused by the breach.