Nearly all cases cited . . . [in a study on the application of the foreseeability test] are decisions on appeal by defendant. Plaintiff often obtains satisfactory results at the trial, but loses all or part of his verdict when defendant appeals. Appellate courts will probably be inclined to sustain the trial court's judgment when the record discloses its logical, as well as evidentiary, basis.

Comment, Lost Profits as Contract Damages: Problems of Proof and Limitations on Recovery, 65 YALE L.J. 992, 1026-27 n.181 (1956) [hereinafter Lost Profits].

35. See FARNSWORTH, supra note 31, at 537-38.

36. See id. at 538-39.

37. See Lost Profits, supra note 34, at 1020.

38. The limitations on damages of causation, foreseeability, and certainty have been used by U.S. judges to limit "disproportionate damages [that] may induce defendant and other businessmen in similar occupations to shun bilateral contracts entirely or to insure against future losses by insisting on liquidated damages that fall short of full compensation, even when the loss would not be disproportionate". Lost Profits, supra note 34, at 996.

39. The trend of awarding consequential damages now favors the injured party. See Murphey, supra note 23, at 422.

40. See Delchi, 1994 WL 495787, at *5.

41. See id.

42. "Incidental damages resulting from the seller's breach include expenses reasonably incurred in inspection, receipt, transportation[,] and care and custody of goods rightfully rejected, any commercially reasonable charges, expenses or commissions in connection with effecting cover and any other reasonable expense incident to the delay or other breach." U.C.C. § 2-715(1) (1991).

43. "Subject to the limitations stated in §§ 350-53, the injured party has a right to damages based on his expectation interest as measured by (b) any other loss, including incidental or consequential loss, caused by the breach . . ." RESTATEMENT (SECOND) OF CONTRACTS § 347 (1981).

44. See JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE 266 (3d ed. 1988); see also, Ohline Corp. v. Granite Mill, 849 P.2d 602, 605 (Utah App. 1993) (stating that in order to recover incidental damages, "a buyer must show that the damages resulting from the breach were reasonable"); Sprague v. Sumitomo Forestry Co., 709 P.2d 1200, 1205-06 (Wash. 1985) (contrasting the difference between consequential damages and incidental damages). But see also, Mohler v. Jeke, 595 A.2d 1247, 1250 (Pa. Super. Ct. 1991) (stating that in order "to recover incidental damages under a breach of contract theory, the damages suffered must be direct and foreseeable").

45.See FARNSWORTH>, supra note 31, at 880-81; see also U.C.C. § 2-715(2)(a) (1991) ("Consequential damages resulting from the seller's breach include (a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise.").

46. See CISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688. Nothing in the CISG suggests an intention to abolish incidental damages. See KRITZER, supra note 3, at 19; Murphey, supra note 23, at 459; see also WHITE & SUMMERS, supra note 44, at 266 (distinguishing between "incidental" and "consequential" damages).

47. SeeCISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688.

48. See U.C.C. § 2-715(1) (1991).

49. See Delchi, 1994 WL 495787, at *5 ("Nonetheless, Delchi's action in expediting shipment of Sanyo compressors was both commercially reasonable and reasonably foreseeable, and therefore Delchi is entitled to recover 504,305,665 lire as the net cost of early delivery of Sanyo compressors . . . .").

50. Cover is the right of the party claiming damages to recover "[i]f the contract is avoided and if, in a reasonable manner and within a reasonable time after avoidance, the buyer has bought goods in replacement or the seller has resold the goods." CISG art. 75, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 689.

51. See Delchi, 1994 WL 495787, at *5 ("The shipment of previously ordered Sanyo compressors did not constitute cover under CISG [A]rticle 75, because the Sanyo units were previously ordered, and hence can not be said to have replaced the nonconforming Rotorex compressors.").

52. CISG art. 77, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 689.

53. See Vertue and Bird, 84 Eng. Rep. 1000, 1000 (1677) (holding that plaintiff in an assumpsit suit cannot collect damages because he did not attempt to avoid damage to goods).

54. The [Restatement of Contracts] states:

(1) Except as stated in Subsection (2), damages are not recoverable for loss that the injured party could have avoided without undue risk, burden or humiliation.
(2) The injured party is not precluded from recovery by the rule stated in Subsection (1) to the extent that he has made reasonable but unsuccessful efforts to avoid loss.

RESTATEMENT (SECOND) OF CONTRACTS § 350 (1981).

55. The U.C.C. states that "[c]onsequential damages resulting from the seller's breach include (a) any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise . . . ." U.C.C. § 2-715(2) (1991).

56. See E. Allan Farnsworth, Damages and Specific Relief 57. See Delchi, 1994 WL 495787, at *5 (allowing plaintiff to collect the cost of mitigating losses).

58. See FARNSWORTH, supra note 31, at 897 ("It is sometimes said that in such cases the injured party is under a duty to mitigate damages. This is misleading . . . .").

59. Under U.S. law, the burden of proof for showing that the injured party has not taken steps to avoid damages is on the party in breach. See FARNSWORTH, supra note 31, at 897.

60. The Court states in a somewhat circular way that the "Sanyo compressors did not constitute cover under CISG [A]rticle 75, because the Sanyo units were previously ordered, and hence can not be said to have replaced the nonconforming Rotorex compressors." Delchi, 1994 WL 495787, at *5. CISG Article 75 defines "cover" goods as those "bought" within a reasonable time after avoidance. See supra note 50 for a definition of cover. Although the Sanyo compressors were "ordered" previously, it is not clear whether they were "bought," thus confusing their status as "covered" goods. See Delchi, 1994 WL 495787, at *5.

61. Delchi, 1994 WL 495787, at *5.

62. See CISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688 ("Damages for breach of contract by one party consist of a sum equal to the loss . . . suffered . . . as a consequence of the breach. Such damages may not exceed the loss which the party in breach foresaw or ought to have foreseen . . . ."). Under the U.C.C., plaintiff can recover commercially reasonable expenditures for unsuccessful cover or avoidance as "incidental damages." U.C.C. § 2-715 (1991). Incidental damages include "additional costs incurred after the breach in a reasonable attempt to avoid loss, even if the attempt is unsuccessful." FARNSWORTH, supra note 31, at 880-81 (citing Coast Trading Co. v. Cudahy Co., 592 F.2d 1074 (9th Cir. 1979) (stating that a seller whose resale was not commercially reasonable cannot recover incidental damages of costs of resale)).

63. See Delchi, 1994 WL 495787, at *5 ("Delchi is entitled to recover 13,200,083 lire for the expenses incurred for handling and storage of Rotorex's nonconforming compressors.").

64. See CISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688; see also supra note 59.

65. See Delchi, 1994 WL 495787, at *5 ("[T]he court holds that Delchi is entitled to 2,103,683 lire as a reasonable expense.") (emphasis added).

66. See supra note 55.

67. See Delchi, 1994 WL 495787, at *5-7.

68. Delchi, 1994 WL 495787, at *6.

69. See id.

70. Id.

71. See id. at *3.

72. Id.

73. Id.

74. See FARNSWORTH , supra note 31, at 841. When a contract is breached or a tort committed, resulting losses or damage may not be caused by the actual breach or the tort itself, but rather by multiple or intervening causes, such as the cancellation of an order by Delchi's British customer or the lack of demand for Arieles in Britain after Rotorex's breach. Such multiple or intervening causes are less likely to relieve a defendant from contractual liability than from tort liability. See id. at 841 n.7 ("Although the same problems of multiple cause and of intervening cause that enliven the law of torts also arise in connection with contract damages, they are relatively less important than in the law of torts.").

75. Delchi, 1994 WL 495787, at *6.

76. "Delchi's claim of 4,000 additional lost sales in Italy is supported only by the speculative testimony of Italian sales agents . . . . The number of additional units they might have ordered . . . is not in evidence, as the court sustained Rotorex's timely objections to the speculative nature of such testimony." Id.

77. See CISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688.

78. The factual causation requirement in U.S. contract law is similar to the causation requirement in a tort claim, except that damages in tort are intended to put the plaintiff in a pre-tort position, while contract expectation damages put the plaintiff in the same position as he would have been had there been full performance. See FARNSWORTH, supra note 31, at 871 ("The basic principle for the measurement of [contract] damages is that of compensation based on the injured party's expectation."). For expectation damages, which include consequential damages, the plaintiff must also demonstrate what his position would have been with contract performance. See id. at 841.

79. See Delchi, 1994 WL 495787, at *6.

80. The English court in Hadley v. Baxendale referred to the French Civil Code's articles 1149-51, and one of the judges referred to the French requirement of foreseeability. See Guenter H. Treitel, Remedies for Breach of Contract (Courses of Action Open to a Party Aggrieved), in 2 INTERNATIONAL ENCYCLOPEDIA OF COMPARATIVE LAW 58 (Arthur von Mehren ed., 1976).

81. Hadley v. Baxendale, 156 Eng. Rep. 145 (1854).

82. See Murphey, supra note 23, at 432 ("The [foreseeability] rule is often discussed as being two rules or one rule in two parts.").

83. Hadley v. Baxendale, 156 Eng. Rep. at 151.

84. Id.

85. "Whatever the connotation in Hadley's day, in time, most authorities in the United States -- and some in England -- equated `foreseeability' with `in the contemplation of the parties' and concluded that Hadley established a rule of foreseeability." Murphey, supra note 23, at 438.

86. See supra notes 54-55.

87. "The principle of excluding damages for unforeseeable losses is found in the majority of legal systems." Commentary, supra note 26, at 59. Although numerous scholars claim that the rule of foreseeability in CISG Article 74 is derived from English common law, it has been forcefully argued that it is instead derived from French law. See Franco Ferrari, Comparative Ruminations on the Foreseeability of Damages in Contract Law , 53 LA. L. REV. 1257, 1263-69 (1993); Detlef König, Voraussehbarkeit des Schadens als Grenze vertraglicher Haftung, in DAS HAAGER EINHEITLICHE KAUFGESETZ UND DAS DEUTSCHE SCHULDRECHT, KOLLOQUIM ZUM 65, GEBURTSTAG VON ERNST VON CAEMMERER 74, 86-130 (Hans G. Leser & W. Frhr Marschall von Bieberstein eds., 1973).

88. 1 ROBERT L. DUNN, RECOVERY OF DAMAGES FOR LOST PROFITS 23 (4th ed. 1992).

89. See Kenford Co. v. County of Erie, 537 N.E.2d 176, 179 (N.Y. 1989) ("In determining the reasonable contemplation of the parties, the nature, purpose and particular circumstances of the contract should be considered . . . as well as `what liability the defendant fairly may be supposed to have assumed consciously . . . .'") (citation omitted).

90. See Keystone Diesel Engine Co. v. Irwin, 191 A.2d 376, 377 (Pa. 1963) (holding that contemplation exists where "buyer has communicated to seller . . . sufficient facts to make it apparent that damages . . . were within reasonable contemplation of the parties").

91. Morrow v. First Nat'l Bank of Hot Springs, 550 S.W.2d 429, 430 (Ark. 1977); see also Western Indus., Inc. v. Newcor Canada Ltd., 739 F.2d 1198 (7th Cir. 1984) (stating in dicta that consequential damages are not recoverable unless specifically negotiated).

92. R.I. Lampus Co. v. Neville Cement Prods. Corp., 378 A.2d 288, 288 (Pa. 1977) ("[B]uyer was not required to establish . . . that seller contemplated or tacitly agreed. . . .").

93. See FARNSWORTH, supra note 31, at 914-15; U.C.C. § 2-715 cmt. 2 (1991) ("The `tacit agreement' test for the recovery of consequential damages is rejected."); RESTATEMENT (SECOND) CONTRACTS § 351 cmt. a (1981) ("[T]he party in breach need not have made a `tacit agreement' to be liable for the loss.").

94. RESTATEMENT (SECOND) OF CONTRACTS § 351(3) (1981).

95. See id.§ 351 cmt. f (1981) ("There are unusual instances in which it appears . . . [that] it would be unjust to put the risk on that party."); see alsoJOSEPH M. LOOKOFSKY, CONSEQUENTIAL DAMAGES IN COMPARATIVE CONTEXT 189 (1989) (explaining a study which revealed only three cases that cited § 351(3), the most relevant being All Points Towing, Inc. v. City of Glendale, 735 P.2d 145 (Ariz. App. 1987)). Lookofsky expressed the fear of some that the discretionary justice represented by § 351(3) goes too far, "posing a threat to commercial certainty and even to classical contract law." Id. at 291.

96. See U.C.C. § 2-715(2)(b) (1991) ("Consequential damages resulting from a seller's breach include injury to person or property proximately resulting from any breach of warranty.").

97. In the United States, foreseeability is not a limitation on liability for tort damages. See RESTATEMENT (SECOND) OF TORTS § 435(1) (1965) ("If the actor's conduct is a substantial factor in bringing about harm to another, the fact that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable.").

98. See CISG art. 75, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 689.

99. U.C.C. § 2-715(2)(a) (1991) (emphasis added).

100. RESTATEMENT (SECOND) OF CONTRACTS § 351(1) (1981) ("Damages are not recoverable for loss that the party in breach did not have reason to foresee as a probable result. . . .").

101. See CISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688 (emphasis added).

102. See Farnsworth, supra note 56, at 253. Although the Restatement of Contracts and the CISG also apply to seller's consequential damages, this Article only discusses a buyer's consequential damages. This approach is taken both because the CISG cases are about buyer's damages and because, in U.S. courts, seller's claims for loss of direct profits from defaulting buyers have received very favorable treatment, raising no important issues of foreseeability. In such cases, courts seem "to presume foreseeability and certainty rules have been met." STEWART MACAULAY ET AL., CONTRACTS: LAW IN ACTION 133 (1995). Commentators argue that this result is appropriate because there is little danger of damage awards disproportionate to the consideration defendant would have gotten from performance since "[c]ontract price is the ceiling of recovery, and the largest cost items to be deducted from that price are the most susceptible to proof." Lost Profits, supra note 34, at 1003 (citations omitted).

103. See FARNSWORTH, supra note 31, at 916 ("One takes the risk of those [consequences] that one ought reasonably to have foreseen."). This is unlike the test in tort law, which rejects the foreseeability limit on damages. Instead, if the defendant's conduct threatens any interest of the plaintiff, defendant is liable for any resultant injury to plaintiff unless that injury is extremely bizarre. See RESTATEMENT (SECOND) OF TORTS § 435 (1965).

104. U.C.C. § 2-715(2)(a) (1991) (emphasis added).

105. RESTATEMENT (SECOND) OF CONTRACTS § 351(1) (1981) (emphasis added).

106. See CISG art. 74, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 688.

107. See WHITE & SUMMERS , supra note 44, at 514-18; Sutton, supra note 19, at 744 (stating that a party "may want to make . . . dangers known to the other contracting party in order to implicate the subjective prong . . . Such notice, however, would also create objective foreseeability today under the [U.C.C.] and the Restatement, thus minimizing the differences between article 74 and American view of foreseeability.").

108. See DUNN, supra note 88, at 36-43.

109. See supra note 50.

110. See FARNSWORTH, supra note 31, at 918 ("Problems of foreseeability do not usually arise unless the injured party who is a buyer cannot cover . . . .").

111. See id. at 919-20. Because most goods are readily available in a competitive market, the inability to cover is not foreseeable in the ordinary course of events. See id. at 878-79. See also RESTATEMENT (SECOND) OF CONTRACTS § 351(2)(a) (1981) ("Loss may be foreseeable as a probable result of a breach because it follows from the breach . . . in the ordinary course of events . . . .").

112. See U.C.C. § 2-715 cmt. 6 (1991) (noting that damages resulting from loss of resale profits are included under consequential damages). Seller is not liable for extraordinary lost profit or losses from unusual terms of buyer's resale contracts or "other circumstances of which seller is ignorant." FARNSWORTH, supra note 31, at 919.

113. See FARNSWORTH, supra note 31, at 920 n.33 (citing Verhagen v. Platt, 61 A.2d 892 (N.J. Super. Ct. 1948)).

114. See id. at 921.

115. "Damages are not recoverable for loss beyond an amount that the evidence permits to be established with reasonable certainty." RESTATEMENT (SECOND) OF CONTRACTS § 352 (1981).

116. Delchi, 1994 WL 495787, at *6 (footnotes added).

117. See LOOKOFSKY, supra note 95, at 181-87.

118. Id. at 283 n.158.

119. Commentators have noted:

Because the legal principle of certainty [relating to damages for loss of goodwill] in the plaintiff's case is indivisible from factual questions about the amount and probity of plaintiff's evidence, it is difficult to make sensible and useful generalizations about that principle. Often cases cited under the certainty rubric could be as easily explained by saying that the 'plaintiff merely failed to prove his damages' or 'failed to prove his case.' So stated, the principle is reduced to a homily.

WHITE & SUMMERS, supra note 44, at 451.

120. See RESTATEMENT (SECOND) OF CONTRACTS § 352 (1981); U.C.C. § 1-106 cmt. 1 (1991) (stating that damages "have to be proved with whatever definiteness and accuracy the facts permit, but no more"); U.C.C. § 2-715 cmt. 4 (1991) ("The burden of proving . . . consequential damages is on the buyer, but the section on liberal administration of remedies rejects any doctrine of certainty which requires almost mathematical precision in the proof of loss. Loss may be determined in any manner which is reasonable under the circumstances."); see also WHITE & SUMMERS, supra note 44, at 269 ("The 'fact-amount' doctrine, however, relaxes the burden of proof on the amount of loss once the buyer has proven the fact of a loss . . . .").

121. CHARLES T. MCCORMICK, LAW OF DAMAGES 105 (1935).

122. L.L. Fuller & William R. Purdue, Jr., The Reliance Interest in Contract Damages, 46 YALE L.J. 373, 376 (1937). It has been forcefully argued that the foreseeability rule should be abandoned because it permits only all-or-nothing recovery and does not necessarily prevent disproportionate damages. See Lost Profits, supra note 34, at 1021-22. This is because what courts often determine to be foreseeable was not in fact foreseen or foreseeable since the test is based on a "fiction." Id. One commentator argues:

[L]oss of profits resulting from breach is seldom foreseen by either plaintiff or defendant at contract time. Moreover, when the parties actually do foresee the risk of loss, they generally allocate that risk . . . by a contractual provision for liquidated damages . . . . But the foreseeability rule is not applied when the loss was in fact considered; the rule is invoked only when a court must effect an allocation for which the parties failed to provide . . . . As a result, the foreseeability rule penalizes one party for omissions made by both at contract time.

Id.

123. See Roy Ryden Anderson, Incidental and Consequential Damages, 7 J.L. & COM. 327, 399-423 (1987); see also RESTATEMENT (SECOND) OF CONTRACTS § 352 cmt. b (1981) ("The difficulty of proving lost profits varies greatly with the nature of the transaction.").

124. Courts have commonly awarded lost profits in this category, including lost resale profits on goods purchased for inventory. Older U.S. cases required that the defendant seller had to have had notice at the time of contract formation of buyer's particular resale transaction. Recent cases have allowed that "knowledge that the buyer was a merchant or that the buyer was ordering quantities too large for its own use" is sufficient for foreseeability of lost resale profits. MACAULAY ET AL., supra note 102, at 133-34; see also Lost Profits, supra note 34, at 1009-10.

125. In cases involving manufacturer-buyer's claims of profits lost because a seller default delayed or prevented the manufacture and sale of their final product, U.S. courts are reluctant to find that the lost profits were foreseeable or reasonably certain. This type of case holds the greatest possibility of disproportionate damages. See MACAULAY ET AL., supra note 102, at 134.

126. See Consolidated Data Terminals v. Applied Digital Data Sys., Inc., 708 F.2d 385 (9th Cir. 1983) (holding that a distributor of computer terminals can recover for loss of customer goodwill resulting from sale of faulty terminals furnished by manufacturer); Roundhouse v. Owens-Illinois, Inc., 604 F.2d 990 (6th Cir. 1979) (stating that although in some cases Ohio would allow a jury to consider loss of goodwill in a breach of warranty case, where plaintiffs are unable to show lost profits or attach any kind of goodwill value to it, such damages must be denied as purely speculative); R.E.B., Inc. v. Ralston Purina Co., 525 F.2d 749 (10th Cir. 1975) (finding that a hog breeder furnished with defective feed can recover for resulting damage to reputation); Texsun Feed Yards, Inc. v. Ralston Purina Co., 447 F.2d 660 (5th Cir. 1971) (holding that an owner of feed lot can recover for loss of customers in connection with use of defective feed supplement provided by feed company); Isenberg v. Lemon, 327 P.2d 1016 (Ariz. 1958) (stating that paint dealer can recover damages from manufacturer for loss of profits and goodwill where paint manufacturer provides dealer an unfit and inferior product for resale); Adams v. J.I. Case Co., 261 N.E.2d 1 (Ill. App. Ct. 1970) (explaining that a plaintiff's complaint for damages for loss of business should not have been dismissed); Delano Growers' Coop. Winery v. Supreme Wine Co., 473 N.E.2d 1066 (Mass. 1985) (commenting that a distributor of wine can recover for loss of goodwill when wine purchased was spoiled by mold); Hydraform Prod. Corp. v. American Steel & Aluminum Corp., 498 A.2d 339 (N.H. 1985) (finding that a manufacturer of wood stoves can only recover from steel manufacturer for loss of profits on sales which steel manufacturer should have foreseen under the terms of the contract and buyer cannot recover for diminished value of business because it is too speculative); Robert T. Donaldson, Inc. v. Aggregate Surfacing Corp. of Am., 47 A.D.2d 852, 366 N.Y.S.2d 194 (N.Y. App. Div. 1975), appeal dismissed , 337 N.E.2d 612 (N.Y. 1975) (noting that plaintiff, a surfacing company, is entitled to recover for loss of profits due to damage to its reputation sustained by a breach, but only to the extent that such damages are not speculative); Sol-o-lite Laminating Corp. v. Allen, 353 P.2d 843 (Or. 1960) (stating that because damage to goodwill does not require exact proof, plaintiff presented adequate evidence about the loss of goodwill to the jury by showing loss of business and refusal of customers to conduct subsequent business with plaintiff).

127. See H.L.A. HART & TONY HONORE, CAUSATION IN THE LAW 312 (2d ed. 1985). One empirical study found that of approximately 200 cases decided between 1946 and 1955, buyer-middleman recovery was allowed in 75% of category one cases, but only in 50% of the buyer-manufacturer category two cases. See Lost Profits, supra note 34, at 1016 n.137.

128. See, e.g., Lewis v. Mobil Oil Corp., 438 F.2d 500, 510 (8th Cir. 1971) ("Where a seller provides goods to a manufacturing enterprise with knowledge that they are to be used in the manufacturing process, it is reasonable to assume that he should know that defective goods will cause a disruption of production, and loss of profits is a natural consequence of such disruption.").

129. See National Controls Corp. v. National Semiconductor Corp., 833 F.2d 491 (3d Cir. 1987) (disallowing damages due to plaintiff's failure to prove defendant's breach was the "proximate cause of [plaintiff's] loss of profits"); General Supply & Equip. Co. v. Phillips, 490 S.W.2d 913 (Tex. Civ. App. 1972) (finding that plaintiff failed to prove with a "reasonable degree of certainty" that his loss of profits was due to defendant's breach).

130. See, e.g., Gurney Indus. v. St. Paul Fire & Marine Ins. Co., 467 F.2d 588 (4th Cir. 1972) (finding that "the effect of contractor's breach . . . upon owner's profits was too remote to warrant recovery of loss of anticipated profits"); Lewis, 438 F.2d at 511 (allowing recovery for lost profits where a "reasonable approximation" of amount lost could be calculated based on business record of past profit); Burrus v. Itek Corp., 360 N.E.2d 1168 (Ill. App. Ct. 1977) (allowing recovery of lost profits based upon testimony of previous productivity).

131. See, e.g., Cates v. Morgan Portable Bldg. Corp., 591 F.2d 17 (7th Cir. 1979) (allowing evidence of profit records from similar motel businesses into calculation of plaintiff's lost profits).

132. See RESTATEMENT (SECOND) OF CONTRACTS § 352 cmt. b (1981) ("However, if the business is a new one or if it is a speculative one that is subject to great fluctuations in volume, costs or process, proof will be more difficult. Nevertheless, damages may be established with reasonable certainty with the aid of expert testimony, economic and financial data, market surveys and analyses, business records of similar enterprises, and the like."); see also Frank L. Williamson, Comment, Remedies -- Lost Profits as Contract Damages for an Unestablished Business: The New Business Rule Becomes Outdated, 56 N.C. L. REV. 693, 734 (1978) (urging the replacement of the new business rule with "a less intractable test" which "takes into account developing commercial and economic realities"); Eric J. Wittenberg, Comment, The State of Lost Profits Damages and Punitive Damages for Breach of Contract in Pennsylvania, 6 J.L. & COM. 531, 543 (1986) (explaining that while Pennsylvania has eased the restrictions of the new business rule, "certainty still remains the standard under Pennsylvania law").

133. But see WHITE & SUMMERS , supra note 44, at 269 ("Claims for lost goodwill have generated a split of authority. We think goodwill losses should be recoverable, on proper proof, and provided there is no double recovery."); see also Anderson, supra note 123, at 420 ("As mercantile practice has moved toward defining parameters of meaning and recognizing methods for calculation of goodwill by economists and accountants, goodwill has become more widely accepted as a recoverable item of consequential loss.").

134. See National Controls Corp. v. National Semiconductor Corp., 833 F.2d 491 (3d Cir. 1987) (describing proximate cause and speculative damages case); Dacor Corp. v. Sierra Precision, 753 F. Supp. 731, 733 (N.D. Ill. 1991) (Speculative-Manufacturer of scuba diving equipment could not assert claim for loss of potential customers against supplier of defective regulator hoses in action for breach of implied warranty of merchantability since such damages are speculative and are "unrecoverable in breach of contract" under Illinois law); Manuel Int'l, Inc. v. M.R. Berlin Co., 525 F. Supp. 90 (N.D. Ill. 1981) (stating as dicta that in a speculative contract claim within a federal anti-trust claim under Pennsylvania law (which did not apply to federal anti-trust action), damages to business reputation and loss of potential customers are speculative); Eastern Dental Corp. v. Isaac Masel Co., 502 F. Supp. 1354 (E.D. Pa. 1980) (disallowing damages for loss of goodwill in any action based on breach of contract); Hydraform Prods. Corp. v. American Steel & Aluminum Corp., 498 A.2d 339 (N.H. 1985) (Souter, J.) (stating that "[a]s a general rule . . . goodwill may be recovered as an element of consequential damages"); George H. Swatek, Inc. v. North Star Graphics, Inc., 587 A.2d 629, 631-32 (N.J. Super. Ct. App. Div. 1991) (explaining the issue of foreseeability where the trial court properly excluded evidence of lost profits and injury to goodwill and reputation as unforeseeable when date for delivery of the goods was not certain).

135. In Neville Chem. Co. v. Union Carbide Corp., 422 F.2d 1205, 1225 (3d Cir. 1970), the court made the "legal conclusion" that "plaintiff may not recover for loss of profits to a business because of customer dissatisfaction or loss of good will." Id. The Neville court distinguished this sort of loss of profits from "loss of profits . . . on the particular sale or contract for the performance of which the goods in question were purchased." Id. at 1225-26. In an earlier opinion applying the tacit agreement test, Armstrong Rubber Co. v. Griffith, 43 F.2d 689, 691 (2d Cir. 1930), Judge Augustus N. Hand declared that "[w]e can hardly doubt that such an uncertain and perilous risk as indemnification against loss . . . of customers was never contemplated by the plaintiff in this case. Nothing was said about it in the negotiations between the parties, and it seems quite unlikely that it ever should have been intended." Courts not applying the tacit agreement test have also held as a matter of law that loss of customers is not reasonably foreseeable. See Chrysler Corp. v. E. Shavitz & Sons, 536 F.2d 743, 744-45 (7th Cir. 1976) (finding that a seller was not liable for damages for breach of a contract for the sale of air conditioning equipment which resulted in a buyer losing customers because seller and buyer were not in a fixed contract covering a definite time period, "seller had no reason to know of any subsequent job opportunities [buyer] might have with customers" and no job opportunities with such customers were pending at the time buyer severed the relationship). The Chrysler court, however, would have allowed loss of profit on contracts in existence or those, "in the offing," at the time of the contract.

136. Delchi, 1994 WL 495787, at *6. The court of appeals' opinion does not state that the district court would not allow evidence on the number of indicated orders. In affirming the district court's ruling on this issue, the Second Circuit held that finding such testimony to be speculative was not clearly erroneous. See Delchi Carrier, SpA v. Rotorex Corp., Nos. 95-7182, 95-7186, slip op. at 5 (2d Cir. Dec. 6, 1995).

137. Outside of Pennsylvania, "a majority of the cases have allowed for the recovery of lost goodwill in proper circumstances." Anderson, supra note 123, at 421 (footnote omitted). But see Robert P. Barbarowicz, Comment, Loss of Goodwill and Business Reputation as Recoverable Elements of Damages Under Uniform Commercial Code § 2-715 -- the Pennsylvania Experience, 75 DICK. L. REV. 63, 63 (1970) (highlighting the Pennsylvania Supreme Court's refusal "to permit recovery for loss of goodwill").

138. See Barbarowicz, supra note 137, at 74-75.

139. In 1977, the Pennsylvania Supreme Court overruled the "tacit agreement test" and replaced it with a "had reason to know" test. This new standard requires that "[i]f a seller knows of a buyer's general or particular requirements and needs, that seller is liable for the resulting consequential damages whether or not that seller contemplated or agreed to such damages." P.I. Lampus Co. v. Neville Cement Prods. Corp., 378 A.2d 288, 292 (Pa. 1977). Thus, a plaintiff need only prove that damages were reasonably foreseeable at the time of entering into the agreement.

140. AM/PM Franchise Ass'n v. Atlantic Richfield Co., 584 A.2d 915, 925-26 (Pa. 1990).

141. See id. at 926.

142. Delchi, 1994 WL 495787, at *7.

144. The United States Code states:

Interest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefor may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the coupon issue yield equivalent (as determined by the Secretary of the Treasury) of the average accepted auction price for the last auction of fifty-two week United States Treasury bills settled immediately prior to the date of the judgment. The Director of the Administrative Office of the United States Courts shall distribute notice of that rate and any changes in it to all Federal judges.

28 U.S.C. § 1961(a) (1988).

145. Delchi, 1994 WL 495787, at *7.

146. Article 58 of the 1976 UNCITRAL Working Group's Draft Convention, which authorized interest only for sellers, was not included in the 1977 and 1978 drafts. See Sutton, supra note 19, at 749.

147. See id.

148. CISG art. 78, supra note 1, S. TREATY DOC. NO. 9 at 37, 19 I.L.M. at 689.

149. See Sutton, supra note 19, at 749. The 1976 draft of the CISG would not have allowed a buyer pre-judgment interest on unliquidated damages.

150. In re Waterside Ocean Navigation Co., 737 F.2d 150, 153 (2d Cir. 1984) (quoting Lodges 743 & 1746, International Ass'n of Mach. v. United Aircraft Corp., 534 F.2d 422, 446 (2d Cir. 1975), cert. denied, 449 U.S. 825 (1976)).

151. See id. at 154.

152. CISG art. 7(2), supra note 1, S. TREATY DOC. NO. 9 at 23-24, 19 I.L.M. at 673.

153. See Sutton, supra note 19, at 750 ("If courts interpret article 78 in the context of their own legal traditions, then interest could conceivably be awarded under the Convention for liquidated as well as unliquidated damages, or for damages based on current price and substitute transactions.").

154. See Klaxon Co. v. Stentor Co., 313 U.S. 487, 494 (1941).

155. In Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), the Supreme Court determined that there is no federal general common law. Since then, federal courts have developed a federal common law in certain limited fields, including the area of foreign relations. For example, in Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964), the issue was whether the "act of state" doctrine was governed by state or solely by federal law, which would be binding on state courts. The Court, in holding that federal decisional law controlled, stated that it "seems fair to assume that the Court did not have rules like the act of state doctrine in mind when it decided Erie R. Co. v. Tompkins." Id. at 425; see also ALAN C. SWAN & JOHN F. MURPHY , CASES AND MATERIALS ON THE REGULATION OF INTERNATIONAL BUSINESS AND ECONOMIC RELATIONS 1139 (1991) (stating that Banco Nacionale de Cuba "is most often cited in favor of a federal common law of foreign relations").

156. See Joseph A. Zirkman, New York's Choice of Law Quagmire Revisited, 51 BROOK. L. REV. 579, 586 (1985) (highlighting a New York case in which the choice of law was determined by which jurisdiction had "greater interest in deciding the particular litigated issue"); see also Associated Metals & Minerals Corp. v. Sharon Steel Corp., 590 F. Supp. 18 (S.D.N.Y. 1983) (enforcing a contractual choice of Pennsylvania law where Pennsylvania had a "reasonable relationship" to the subject of the contract dispute).

157. In O'Rourke v. Eastern Air Lines, Inc., 730 F.2d 842 (2d Cir. 1984), the court held that calculation of pre-judgment interest in a wrongful death action under a New York statute is considered a substantive issue, but the issue of whether to award such interest depended on whether pre-judgment interest was consistent with the goals of the Warsaw Convention and the Montreal Agreement. In O'Rourke, the Second Circuit found the award of pre-judgment interest was not consistent with those international agreements, but the Fifth Circuit in Domangue v. Eastern Air Lines, Inc., 722 F.2d 256 (5th Cir. 1984), found that pre-judgment interest was consistent with the Convention and was a valid exercise of the court's discretion.

158. According to the New York Code:

Interest to verdict, report or decision: (a) Actions in which recoverable. Interest shall be recovered upon a sum awarded because of a breach of performance of a contract, or because of an act or omission depriving or otherwise interfering with title to, or possession or enjoyment of, property, except that in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court's discretion.

N.Y. CIV. PRAC. L. & R. 5001 (McKinney 1992 & Supp. 1995). Pennsylvania has developed a similar rule in its courts. See United States v. Bethlehem Steel Corp., 113 F.2d 301, 308 (3d Cir. 1940) ("Likewise it is well settled in Pennsylvania that in an action to recover unascertained damages for a breach of contract the allowance of interest prior to judgment is discretionary."). One scholar found that courts consider the following laws applicable for the determination of the interest rate:

(1) law of place of payment: ICC award no. 7153, 1992 J.D.I. 1005; (2) law of creditor: LG Stuttgart Sept. 5, 1989, 1990 IPRAX 317; LG Frankfurt Sept. 16, 1991, 1991 RIW 952; KG Berlin Jan. 24, 1994, 1994 RIW 683; OLG München Mar. 2, 1994, 1994 RIW 545: ICC award no. 7197, 1993 J.D.I. 1028; (3) law of place of actual loss: LG Aachen Apr. 3, 1990, 1990 RIW 491; (4) proper law of contract: AG Oldenburg Apr. 24, 1990, 1991 IPRAX 336; LG Hamburg Sept. 26, 1990, 1991 IPRAX 400; Belgian Cass., Nov. 29, 1990, 1990 RIW 1270; (5) law of debtor or creditor: OLG Frankfurt June 13, 1991, 1991 RIW 591; OLG Frankfurt Apr. 20, 1994, 1994 RIW 593.
HANS VAN HOUTTE, THE LAW OF INTERNATIONAL TRADE 147 n.25 (1995). See also Interpretive Decisions Applying CISG, Journal of Law & Commerce Case I: Oberlandesgericht, Frankfurt Am Main, 14 J.L. & COM. 201, 202 (1995) ("Pursuant to German international private law, to determine the interest rate under CISG Article 78, the court must refer to national law."). Legal scholars and courts in Germany have concluded that the conflict of law rules of the forum should determine which law will govern the awarding of interest under the CISG. See Peter Schlechtriem, Anmerkung, in SCHIEDSSPRÜCHE ZU STREITIGKEITEN AUS INTERNATIONALEN KAUFVERTRÄGEN: ANWENDBARKEIT DES CISG 590, 592-94 (1995).
159. See Judgment of Oct. 24, 1980, BGH [Supreme Court], 1981 IPRAX 96-98; MICHAEL R. WILL, CISG -- INTERNATIONAL BIBLIOGRAPHY 1980-1995 (4th ed. 1995).
160. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
161. The contract was for 28-day-old Gouda Cheese at 5.59 DM/kg. See id.
162. Seller claimed buyer owed 466,732.28 DM including interest. See id.
163. Buyer claimed Seller discounted the price to 5.50 DM/kg. Thus, the contract price was 12,244.50 DM less than Seller claims. See id.
164. The defective cheese lacked ripeness, had softened, and had salt deposits under their rinds. See id.
165. See id.
166. See id.
167. The trial court in Germany is known as Landgericht.
168. The trial court declared that Buyer owed Seller 453,812.28 DM plus interest. The intermediate court, in affirming the trial court, found that the contract price of the cheese was 5.59 DM/kg and that three percent of the delivered cheese was defective. Additionally, the court found that Buyer complained to Seller of the defective cheese in a timely manner each time a customer demanded damages. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
169. The intermediate court of appeals in Germany is known as Oberlandesgericht.
170. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
171. See id.
172. The German courts in this case applied Article 82 of the Unified Law of the International Sale of Movable Things as the controlling law of this contract for the sale of cheese between a German and Dutch merchant. This law is one of two German laws derived from the 1964 Hague Conventions on the Sale of Goods which were adopted in Germany on July 17, 1973. Article 82 of the Hague convention became part of German law as the "Einheitliches Gesetz über den Internationalen Kauf beweglicher Sachen," or "EKG." It is but one of five different sets of laws which German courts continue to apply to international sales contracts formed prior to January 1, 1991.
The second body of law derived from the 1964 Hague Conventions is the Unified Law of the Formation of International Contracts for Movable Things, known as the "Einheitliches Gesetz über den Abschluss von Internationalen Kaufvertragen über begwegliche Sachen" or "EAG." This body of law has been applied by German courts to contract disputes when the parties have branch offices in different contracting states and the contract in question involves a cross-border sale.
If a German court found that the EKG or the EAG did not apply to an international sales contract, it would use German conflict of law rules under Articles 27 and 28 of the Introductory Law to the German Civil Code ("BGB") to determine which law controlled the contract. These conflict of law rules could result in two other bodies of law controlling the contract. First, if the German court decided that German municipal law controlled, the court would look to the BGB and the German Commercial Code ("HGB"). However, if the German court decided that the law of a foreign country applied, it would apply the national law of that country. Of course, if that foreign country were a signatory to an international convention on the international sale of goods, such as the Hague Conventions or the CISG, then that convention as applied by the signatory country would control the contract in the German court. See Gerhard Manz & Susan Padman-Reich, Germany Standardises Law on International Sale of Goods, INT'L FIN. L. REV., Oct. 1990, at 14 (detailing the adoption of the CISG in Germany).
173. The complex formula governing the applicability of law as discussed in the previous note was changed when the CISG came into force in Germany on January 1, 1991. Because the CISG was self-executing, it automatically repealed the confusing array of law governing all contracts for the international sale of goods formed after January 1, 1991. Although the EKG and the EAG do not apply to contracts formed after 1990, the decisions of the German courts interpreting them are instructive as to the probable application of the CISG. These pre-CISG cases are particularly instructive because Germany has adopted the complete text of the CISG, which is quite similar to the EKG and the EAG. Indeed, some of the problems the German courts encountered with the Hague Conventions may continue under the German adoption of the CISG. As discussed supra note 172, Germany accepted some major changes to its traditional law of obligations in adopting the Hague conventions and the CISG. See Manz & Padman-Reich, supra note 172, at 14.
174. See KRITZER , supra note 3, at 477 ("Because these ULIS articles are so similar [EKG Article 82 and CISG Article 74], [A]rticle 82 precedents may be regarded as relevant to interpretations of CISG [A]rticle 74.").
175. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
176. See id.
177. The survey focused on the German-Dutch Trade Association and the Industrial and Trade Association of Düsseldorf. See id. at 98.
178. See id.
179. The German Supreme Court is known as Bundesgerichtshof.
180. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
181. Id. at 97. Under German laws based on the Hague Conventions (EKG and EAG), the parties to the contract were allowed to choose which law controlled their contract, thereby avoiding application of the EKG or the EAG. In the cheese case, the German Supreme Court noted that the parties did not affirmatively choose the EKG as the controlling law of their contract. However, because the parties did not impliedly or expressly make a choice of law decision, the EKG would apply, specifically Article 3 of the EKG. After the cheese case, in 1986, the German Supreme Court went even further in applying Article 3 of the EKG when deciding that a German court, in hearing a dispute between United Kingdom and German partners, should apply the EKG even if the contract expressly provides that the German municipal law should apply. Although this 1986 decision allowed the contracting parties to exclude, either expressly or impliedly, the EKG under Article 3, the decision clarified that an implied exclusion will not readily be found. The fact that the parties did not mention the EKG in the contract was not held as an exclusion, presumably on the ground that the EKG was also a part of German municipal law. To be certain that the EKG will not apply to an international sales contract, the parties must expressly exclude the EKG. The German Supreme Court's affirmative exclusion was an interesting development because the United Kingdom, in adopting the Hague Conventions as its Uniform Law for the International Sales of Goods Act in 1967, provided in § 1(3) that the Uniform Law would control a contract of sale only if it was affirmatively selected by the contract parties. In almost twenty years, no case arose in the UK where the Uniform Law governed a contract. See F.A. Mann & Herbert Smith, International Briefings: West Germany; When Uniform Sales Law Applies, INT'L FIN. L. REV., June 1986, at 37.
182. See Judgment of Oct. 24, 1980, 1981 IPRAX at 98.
183. See id.
184. See id.
185. See id. at 97.
186. See id.
187. Id.
188. See id. at 97-98.
189. See id. at 98.
190. See id. (citing Judgment of Dec. 1, 1965, 1966 NJW 502).
191. See id.
192. See id.
193. See id.
194. The German Supreme Court based its determination on the finding that lost profits were unforeseeable as informed by a written inquiry to the trade associations regarding the state of mind of merchants in the field on April 4, 1978. The survey inquired as to whether a Dutch importer in January 1977, who delivers cheese to a German importer, should have foreseen that customers of the German importer would discontinue business if three percent of the goods delivered by the Dutch importer were defective, as was the cheese in this case. Based on this survey, the court of appeals found the damages claimed by Buyer were unforeseeable. See id.
195. See id.
196. Most importantly, the court of appeals failed to disclose the survey questions. It was not clear to the German Supreme Court whether the court of appeals' survey asked about the foreseeability of the buyer's customers discontinuing business or about the foreseeable behavior of the customer's customers discontinuing business as a result of the defects. See id.
197. See id.
198. A "berufung" is an appeal on points of fact and law. See DANNEMANN , supra note 27, at 111-13; David S. Clark, The Selection and Accountability of Judges in West Germany: Implementation of a Rechtsstaat, 61 S. CAL. L. REV. 1795, 1808-14 (1988).
199. See Judgment of Oct. 24, 1980, 1981 IPRAX at 98. "Revision" is an appeal on points of law. See DANNEMANN , supra note 27, at 111. In the cheese case, the German Supreme Court cited a prior decision in which the BGH discussed the difference between unreviewable factual findings of trade usage and unsubstantiated official declarations which are subject to review. See Judgment of Dec. 1, 1965, 19 NEUE JURISTICHE WOCHENSCHEIFT [sic] [NJW] 502, 503. Although not referred to by the Court, the German Code of Civil Procedure § 139(1) states "[t]he presiding judge shall ensure that the parties completely disclose all relevant facts and make the pertinent motions, and especially also supplement insufficient particulars concerning asserted facts and describe the evidence . . . ." ZIVILPROZEßORDNUNG [ZPO] § 139, translated in THE CODE OF CIVIL PROCEDURE RULES OF THE REPUBLIC OF GERMANY OF JANUARY 30, 1877 AND THE INTRODUCTORY ACT FOR THE CODE OF CIVIL PROCEDURE RULES OF JANUARY 30, 1877 37 (Simon L. Goren trans., 1990); see also Hein Kötz, Civil Litigation and the Public Interest, 1 CIV. JUST. Q. 237, 242 (1982) ("[A] judge's failure to discharge his duties under section 139 constitutes a procedural error.").
200. "The drafters of the German Civil Code approached the general problem of the relief available to an aggrieved party from three different perspectives: (1) a distinction between one-sided and two-sided contracts; (2) separate treatment of cases of delay (Verzug) and of impossibility; and (3) individualized handling of, and special rules for, various typical contractual regimes (e.g., sale, contract to make an object (Werkvertrag), contract to furnish services, (Dienstvertrag)). This approach results in an intricate and complex system which renders generalization difficult." ARTHUR T. VON MEHREN & JAMES R. GORDLEY, THE CIVIL LAW SYSTEM 1108 (2d ed. 1977) (footnotes omitted).
201. Id. at 1109 n.27 (citing ERWIN DITTMAR , Das Problem der Schadenersatzleistung 218 (1946)).
202. The BGB classifies breach as being of two possible types: delay in performance, "Verzug," or impossibility, "Unmöglichkeit." After the enactment of the BGB in 1902, the courts developed a concept of positive breach, "positive Vertragsverletzung," for defective performance. See NORBERT HORN ET AL., GERMAN PRIVATE AND COMMERCIAL LAW: AN INTRODUCTION 105 (1982). The discovery of the necessity for positive breach occurred in 1904; see E.J. COHN, MANUAL OF GERMAN LAW 117 (2d ed. 1968). But cf. Eyal Zamir, Toward a General Concept of Conformity in the Performance of Contracts, 52 LA. L. REV. 1, 9 n.12 (1991) (standing alone in dating the development of the doctrine to the 1920s). The most likely date is 1902, with the delivery of an influential paper by Staub on a German Juristentag. See infra note 209 and accompanying text.
203. See BÜRGERLICHES GESETZBUCH [BGB] § 459.
204. See HORN ET AL., supra note 202, at 125-26.
205. See BGB § 463.
206. See HORN ET AL., supra note 202, at 127-28. Whether a warranty will be implied may depend on the type of trade involved. German courts may readily find implied warranties when used car dealers state that a car is road-worthy or overhauled. Id.
207. See COHN , supra note 202, at 134.
208. See BGB § 480.
209. See HORN ET AL., supra note 202, at 126.
210. See COHN , supra note 202, at 133; HORN ET AL., supra note 202, at 112-14.
211. See VON MEHREN & GORDLEY , supra note , at 1114 n.49 (arguing also that certainty is a greater burden of proof in U.S. law than the normal burden of a preponderance of the evidence).
212. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
213. BGB § 252.
214. See id. § 252.
215. See GUENTER H. TREITEL , REMEDIES FOR BREACH OF CONTRACT 164 (1988).
216. Id. at 107.
217. See BGB § § 241-304.
218. See id. § 254(2).
219. See id. § 254(1). BGB § § 251 and 254(2) provide that if the buyer knows of the potential of high damages, he must warn the seller or have his damages reduced on the basis of comparative fault. BGB § 242, which requires good faith, has been cited as precluding disproportionate damages, but this argument has been disputed. See infra note 233. The "expectation ceiling" concept is traced to German law. See LOOKOFSKY , supra note 95, at 183-87.
220. See TREITEL , supra note 215, at 164 (stating that the legislative history of the BGB shows a deliberate rejection of the foreseeability test).
221. See VON MEHREN & GORDLEY , supra note 200, at 1115 n.53 (citing II/1 PLANCK (-STROHAL), KOMMENTAR ZUM BÜRGERLICHEN GESETZBUCH 252 (4th ed. 1914)).
222. Id. at 1115 n.57 (citing Judgment of Feb. 15, 1913, in 81 ENTSCHEIDUNGEN DES REICHSGERICHTS , ZIVILSACHEN [RGZ] 359).
223. See Peter Schlechtriem, Voraussehbarkeit und Schutzzweck einer verletzen Pflicht als Kriterium der Eingrenzung des ersatzfähigen schadens im deutschen Recht, in LAW IN EAST AND WEST 505, 512 (Institute of Comparative Law ed., 1988).
224. See id. at 514-15.
225. See id. at 514 (noting that the EKG foreseeability limitation influenced the development of German case law for domestic sales).
226. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
227. LUDWIG ENNECCERUS & HEINRICH LEHMAN , RECHT DER SCHULDVERHAELTNISSE 73 (15th ed. 1958).
228. Id.
229. See Schlechtriem, supra note 223, at 507-08.
230. TREITEL , supra note 215, at 163.
231. Id. at 163.
232. Id.
233. See Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
234. Id. at 97.
235. See id.
236. Id. at 97-98.
237. HANS DÖLLE, KOMMENTAR ZUM EINHEITLICHEN KAUFRECHT 63 (1976).
238. See TREITEL , supra note 215, at 164-65 (arguing that there is "a considerable degree of similarity between the two theories).
239. Id. at 164 (citations omitted).
240. Hadley v. Baxendale, 156 Eng. Rep. 145, 151 (1854).
241. Id. (stating the loss as one "reasonably . . . supposed to have been in the contemplation of both parties, at the time they made the contract").
242. See TREITEL , supra note 215, at 164-65.
243. See id.
244. See id. at 165. The example given is a contract to sell a house to a purchaser who could have made an unusually high profit out of a resale of the house. It is argued that under the Anglo-American foreseeability test, the buyer could not collect for more than ordinary lost profit, while in Germany, "so long as the `kind' of loss suffered satisfies the `adequate causation' test the defendant is liable to the full `extent' of the loss." Id. This state of affairs has led to reform movements in Germany to limit damages. See id. at 166. One suggestion, that BGB § 242 requiring good faith be used to limit damages, has been criticized as being too uncertain. See id. The criticism that German law does not recognize a principle requiring liability to be proportionate to the degree of fault led to a proposal for an amendment of the BGB that would make the degree of fault a relevant factor for reducing damages, which otherwise would be exceptionally high. An additional factor in German law that favors plaintiffs is that the expected consequences of a breach are determined at the time of the breach rather than at the time of formation. See id.
245. Judgment of Oct. 24, 1980, 1981 IPRAX at 97.
246. See König, supra note 87, at 130.
247. See Schlechtriem, supra note 223, at 514-15.
248. See supra notes 177-78 and accompanying text.
249. See supra note 190.
250. See NIGEL FOSTER, GERMAN LAW & LEGAL SYSTEM 156 (1993); supra note 198 and accompanying text.
251. See generally Note, Public Opinion Surveys as Evidence: The Pollsters Go to Court, 66 HARV. L. REV. 498, 501-06 (1953) (identifying the hearsay rule and probative value as two major evidentiary problems surrounding the use of public opinion surveys in a court of law) [hereinafter Public Opinion]. In the United States, this type of polling evidence has been admitted in intellectual property cases to determine the similarity of products. See, e.g., Tomy Corp. v. P.G. Continental, Inc., 534 F. Supp. 595 (S.D.N.Y. 1982) (allowing survey which showed confusion between similar products admitted in unfair competition case); Miles Labs, Inc. v. Frolich, 195 F. Supp. 256 (S.D. Cal. 1961) (allowing a survey which demonstrated confusion between trademark owner's name and that of an alleged infringer). The results of surveys have also been admitted in support of motions for change of venue. See, e.g., United States v. Tokars, 839 F. Supp. 1578 (N.D. Ga. 1993) (admitting a survey into evidence to show that a substantial portion of potential jurors had already formed an opinion regarding a criminal defendant's guilt or innocence).
Although defendants in many cases, especially obscenity cases, often try to have surveys admitted to show that the materials at issue were not offensive when judged by contemporary community standards, such polls are infrequently admitted into evidence because it is difficult to fashion questions that will produce relevant responses. See, e.g., United States v. Pryba, 678 F. Supp. 1225 (E.D. Va. 1988) (excluding a public opinion poll because questions were not designed to elicit information about whether there was community acceptance of materials in question); State v. Cooley, 766 S.W.2d 133 (Mo. Ct. App. 1989) (excluding survey offered to show that other neighborhood stores sold similar materials and that defendant's publications therefore did not offend community standards).
In administrative hearings, however, where there are less formal rules of evidence, such polls often have been admitted into evidence. See, e.g., Arrow Metal Prods. Corp. v. FTC, 249 F.2d 83 (3rd Cir. 1957) (upholding FTC's admission of survey offered to show whether a term was capable of deceiving the public).
252. Public Opinion, supra note 251, at 507.
253. See id., supra note 251, at 507.
254. See Judgment of Oct. 24, 1980, 1981 IPRAX at 98; supra note 196 and accompanying text.
255. See Delchi, 1994 WL 495787, at *5. The district court first cited JOHN HONNOLD, UNIFORM LAW FOR INTERNATIONAL SALES § 415 (2d ed. 1991) for the proposition that the "CISG permits recovery of lost profit resulting from a diminished volume of sales." Delchi, at *6. Second, the district court cited a Comment for the proposition that CISG Article 74 "seeks to provide an injured party with the benefit of the bargain." Id. at *4 (citing Sutton, supra note 19, at 742-43).
256. For a recently published bibliography giving a detailed list of this literature, see WILL , supra note 159.
257. Kritzer, supra note 3, at 109.
258. CISG art. 7(1), supra note 1, S. TREATY DOC. NO. 9 at 23, 19 I.L.M. at 673.
259. Commentary, art. 6, supra note 26, at 17.
260. LOOKOFSKY , supra note 95, at 283 n.158.
261. CISG art. 7(2), supra note 1, S. TREATY DOC. NO. 9 at 23-24, 19 I.L.M. at 673.
262. Articles 27 and 28 of the Einführungsgesetz zum Bürgerliches Gesetzbuch ("EGBGB") state that if no choice of law is indicated in the contract, courts should apply the law to which the contract has the most significant relationship. EGBGB art. 28(1). For another view, see DANNEMANN , supra note 27, at 54 (stating that German scholars are debating whether issues left to domestic law should be addressed by "applying the law that has the closest link with the particular question, or whether one should assume a hypothetical `proper law of the contract'").
263. See Codice Civile § 1225 (Italy).
264. See DANNEMANN , supra note 27, at 5 (noting that "the influence of scholars on the interpretation and development of law is much greater in Germany than in most common law countries").
265. Sutton, supra note 19, at 741.
266. Id.