ABSTRACT
In this article I review the long-vexed issue of the meaning of ‘consequential’ as a term in exclusion clauses, critiquing the jurisprudence of the High Court and the Court of Appeal in England and Wales. In a detailed review of doctrine, empirical study, and drawing on experience, I demonstrate that courts get grammar wrong, misunderstand the limb one / limb two Hadley v Baxendale divisor and ascribe clearly remote losses to limb one. I argue that they ignore important comment from the House of Lords and Supreme Court. I show that the commercial meaning of ‘consequential’, supported by eminent textbooks and empirical evidence, which is what parties intend, is ignored by courts which treat the term as if ‘consequential’ connotes causation whereas commercial players use it in the sense of a genus or type of loss. I suggest practical drafting and hazard a default description of ‘consequential’ as a commercial/legal term.
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Soper, C Haward, ‘Consequential Loss? In a Sense No Loss Is Consequential’ (2023) 1 Contract and Commercial Law Review.
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