Who should bear the risk of market volatility? Ian Gascoigne reports
“Always expect the unexpected.” Perhaps this is a good lesson for life, especially in these turbulent times in the financial world, but it is not something a contract breaker is required to do. He is required only to expect what it is reasonable to anticipate will happen as a consequence of his failure to perform his agreement. He does not have to engage in speculation about something which could happen if it is not likely to do so. Therefore, a victim of contract breach may suffer losses which he cannot recover because their occurrence cannot be said to be probable from the outset.
Without any variation in a particular contract, this principle requires a party in breach to pay the bill arising from the consequences of what the parties reasonably contemplated as the probable result of breach, at the time they made their agreement. The ambit is to be assessed either objectively, or as a result of special circumstances which are known to both parties when they made their contract. If drawing the line between probable
