Also known as: foreseeability · foreseeability doctrine
Written by attorneys · grounded in primary & secondary sources — see below
A principle requiring that harm or loss be a probable consequence that the actor or breaching party had reason to anticipate at the time of the relevant conduct or agreement before liability or damages may be imposed. The requirement limits recovery to those results that follow in the ordinary course or from special circumstances made known in advance. It serves both fairness and efficiency by protecting parties from surprise exposure while encouraging disclosure of unusual risks.
Fidelity Trust sold tires to a retailer in State X. A buyer later drove the tires into State Y where an accident occurred. State Y attempted to assert jurisdiction over Fidelity Trust solely because the tires had entered the state. The court declined because Fidelity Trust had not purposefully directed any activity toward State Y's market.
Eastern Air Lines contracted with Gulf Oil for jet fuel at a fixed price tied to posted domestic oil rates. When imported oil prices rose sharply due to regulation, Gulf sought to avoid performance. The court enforced the contract because the price fluctuation was a risk the parties could have foreseen and allocated at formation.
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Transatlantic Financing agreed to carry wheat from the United States to Iran via the Suez Canal. When the canal closed, the carrier completed the voyage around the Cape of Good Hope at greater expense and sought extra compensation. The court denied relief because the longer route was a foreseeable alternative means of performance.
East River Steamship purchased ships whose turbines later malfunctioned, causing only economic loss in the form of repair costs and lost profits. The charterers sued the turbine manufacturer in tort. The court held that the economic injury was governed by contract warranty rather than tort because the parties had allocated such risks through their agreement.
An attorney prepared a will that failed to comply with attestation requirements, causing intended beneficiaries to lose their bequests. The beneficiaries sued the attorney for negligence. The court permitted recovery because the harm to the intended beneficiaries was a foreseeable result of negligent drafting.
Aluminum Company of America contracted to supply aluminum at a price indexed to a trade journal's posted domestic oil price. New federal regulations caused the journal to publish only regulated prices, dramatically increasing Alcoa's production costs. The court enforced the contract because the regulatory change was a foreseeable commercial risk the parties could have addressed.
Yes. When a buyer explains during contract talks that equipment is needed to secure a specific new national account, the seller has reason to know the loss of that account is a probable result of late or defective delivery.
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Damages must still be proved with reasonable certainty. Projections of lost profits from an entirely new venture lack sufficient historical data even when the loss itself was foreseeable.
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No. When the unlawful act creates the precise type of risk the violated regulation was designed to prevent, ordinary maritime hazards or equipment failures remain foreseeable consequences of the violation.
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No. The loss must be probable rather than merely possible, and the breaching party must have had reason to know of the special circumstances producing that probability.
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…result of the breach. In a warranty action where the loss is purely economic, the limitation derives from the requirements of foreseeability and of privity, which is still generally enforced for such claims in a commercial setting. In products-liability law, where there is a duty to the public generally, foreseeability is an…