This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
As a necessary deduction from the rule that damages are recoverable only if they flow from the breach in the natural course of events or are within the contemplation of the parties, it follows that damages so remote as to fall without these rules cannot be recovered. It often happens that profits which the injured party hoped to realize out of the transaction fall within this rule; or partly within this rule and partly within the rule that damages must be certain ;1 or partly within the rule that only such special circumstances as are within the contemplation of the parties can be considered in estimating damages.2 Thus on breach of contract by a landlord to repair a dwelling house, no recovery can be had by the tenant for loss of profits caused by the interruption to business.3 So on breach of a covenant to renew a lease, future profits that would be made thereby cannot be recovered.4 So on breach of a contract to complete a railroad, loss of profits that would have been made on shipments is too remote.5 So if a vessel contracted for is not delivered in time, loss of profits is too remote. The measure of damages is interest on the amount paid in advance for the time of delay.6 So it has been held that on breach of a contract to sell a patent-right, profits of a contemplated resale cannot be recovered.7 So damages arising from breach of a contract to locate a business in a specified city and to maintain it for five years, which damage consists in injury to the value of the promisee's property, is too remote.8 On the other hand, damages caused by loss of grain by shelling out, owing to a delay in cutting it, are not too remote in an action for breach of such contract by reason of such delay.9 So on a sale of diseased animals, infection of sound animals by being placed with the diseased animals is not too remote.10
8 Griff en v. Electric Co., 115 Fed. 749.
9 Wakeman v. Mfg. Co., 101 N. Y. 205; 54 Am. Rep. 676; 4 N. E. 264.
1 See Sec. 1575.
2 Stoddard v. Treadwell, 26 Cal. 294; Somers v. Wright, 115 Mass. 292; Mason v. Howes. 122 Mich. 329; 81 N. W. Ill; White v. Miller, 71 N. Y. 118; 27 Am. Rep. 13.
3 Mason v. Howes, 122 Mich. 329; 81 N. W. 111.
4Grubb v. Burford, 98 Va. 553; 37 S. E. 4.
5 Atlantic, etc., Ry. v. Construction Co., 98 Va. 503; 37 S. E. 13.
6 De Ford v. Steel Co., 113 Fed. 72.