John C.P. Goldberg & Benjamin C. Zipursky, Vosburg v. Baxendale, in Civil Wrongs and Justice in Private Law 463 (Paul B. Miller & John Oberdiek eds., 2020).
Abstract: This chapter addresses a basic difference between the rules governing tort and contract damages. It also explains why this already puzzling divergence is all the more puzzling in virtue of a seemingly intuitive “foreseeable-at-breach” rule that tort law rejects in favor of one that is less restrictive, while contract law rejects in favor of one that is more so. The chapter sets out to explain this phenomenon, in the process defending and illuminating prevailing doctrine. Two cases provide the focal point for this discussion. Hadley v. Baxendale (1854) stands for the rejection, in contract law, of the foreseeable-at-breach rule in favor of foreseeability of loss at the time of contract formation. Vosburg v. Putney (1891), meanwhile, holds that damages may be recovered in a tort action even if not reasonably foreseeable at the time of breach.