Section 73 (2) of Indian Contracts Act deals with remoteness of damages.

The rule has been laid down in the leading case on the point pf adle! ". #a$endale (%&'( ) * +$. 3(%) where it has been obser"ed that the Court will ta,e into account onl! such loss as ma! be fairl!- as reasonabl! be considered either arising naturall!i.e. according to the usual of things- from breach of contract itself- or such as ma! reasonable supposed to ha"e been in the contemplation of both the parties at the time the! made the contract as the probable result of the breach of it. .emoteness of damages for remote conse/uences is usuall! not allowed. The loss from the breach must naturall! arise in the usual course of things or it must be such as the parties ,new when the! made the contract to be li,el! to result from the breach of it. In other words- damages would be considered as too remote if the! are not the direct conse/uence of the breach or the! are not in the contemplation of the parties when the contract was made. owe"er- if the special circumstances were common to both parties- damages would be then amount of in0ur! which would follow from such special circumstance. Illustrations1

A contracts to pa! a sum of mone! to # on da! specified. A does not pa! the mone! on that da!# in conse/uence of not recei"ing the mone! on that da!- is unable to pa! his debts and is totall! ruined. A is not liable to ma,e good to # an!thing e$cept the principal sum he contracted to pa! together with interest up to the da! of pa!ment. A hires #2s ship to go to #omba!- and there ta,e on board on the first of 3anuar!- a cargo which A is to pro"ide- and bring it to Calcutta- the freight to be paid when earned. #2s ship does not go to #omba!- but has opportunities of procuring suitable con"e!ance for the cargo upon terms as ad"antageous to those on which he had chartered the ship. A a"ails himself of these opportunities but is put to trouble and e$penses in doing so. A is entitled to recei"e compensation from # in respect of such trouble and e$penses. A contracts to bu! from # at a stated price- '4 tons of rice- no time being fi$ed for deli"er!. A afterwards informs # that he will not accept the rice if tendered to him. # is entitled to recei"e from A- b! wa! of compensation the amount- if an!- b! which the contract price e$ceeds that which # can obtain for the rice at the time when A informs # that he will not accept it. A contracts to bu! #2s ship for .s 54-444 but

brea,s his promise. A must pa! to #- b! wa! of compensation the e$cess if an! of the contract price o"er the price which # can obtain for the ship at the time of the breach of promise. A- the owner of boat contracts with # to ta,e a cargo of 0ute to 6ir7apur for the sale at that place- starting on a specified da!. The boat owing to some a"oidable cause does not start at the time appointed- whereb! the arri"al of the cargo at 6ir7apur is dela!ed be!ond the time when it would ha"e arri"ed if the boat had sailed according to the contract. After that date and before the arri"al of the cargo- the price of 0ute falls. The measure of the compensation pa!able to # b! A is the differences between the price which # could ha"e obtained for the cargo at 6ir7apur at the time when it would ha"e arri"ed if forwarded in due course and its mar,et at the time when it actuall! arri"ed. A contracts to repair #2s house in a certain manner- and recei"es pa!ment in ad"ance. A repairs the house- but according to contract. # is entitled to reco"er from A the cost of ma,ing the repairs that conform to the contract. A contracts to let his ship to # for a !ear from the first of 3anuar!- for a certain price. 8reights rise and on the first of 3anuar! the hire obtainable for

the ship is higher than the contract price. A brea,s his promise. e must pa! to #- b! wa! of compensation a sum e/ual to the difference between the contact price and the price for which # could hire for a !ear on and from the first of 3anuar! more at http199www.citeman.com9(77%: remoteness:of:damages.html;i$772<=!To#(