📜 BAR Exam Prep

Consequential damages in contract are recoverable when:

A Always in every breach
B They were foreseeable to the breaching party at the time of contracting
C They are punitive
D Only in tort claims

✓ Correct Answer: Option B

Hadley v. Baxendale: consequential damages (special or indirect losses) are recoverable only if foreseeable at the time of contracting — either arising naturally or from special circumstances communicated to the breaching party.

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