2.3 Why loss perspective?
The issue at hand is whether the owner’s relevant losses are those caused by notice arriving X days late, or those caused by redelivery occurring X days early. We refer to these as alternative loss perspectives because they determine the direction to look for potential losses. Unlike a causal chain, a loss perspective does not set out to describe reality; it is a normative device that provides a setup for the causal inquiry. Loss perspective is therefore conceptually equivalent with causal perspective.(1) The term loss perspective is preferred to avoid invoking the dichotomy between the two causal perspectives that may generally be applied in the measure of damages i.e., the positive and negative interest of contract. The discussion here is narrower and occurs within the framework of the positive interest. It is thought beneficial to frame the research question in this way because it puts the disputed matter into its appropriate context i.e., measurement of damages. Secondly, it provides a neutral framework for analysis i.e., it does not presume or tend towards any outcome. Any measure of damages operates with a loss perspective.
Alternatively, one could treat it as a matter of understanding where the ‘gravamen of the breach lies’, as it is said in e.g., Carver on Charterparties.(2)Supra note 2. It is certainly not incorrect to ask the question in this way, but it is not preferred here. While the relevant losses are those caused by the breach – meaning a breach analysis and a loss perspective analysis is closely related – to identify the breach is not always sufficient to identify the correct loss perspective.
Even when one has fully understood the breach, the contractual norm may be of such a character that it does not follow logically what ought to be considered correct performance for the purpose of measuring damages. This may be the case when the contractual norm has still unresolved freedom degrees, a wiggle room. A classic example is where a party to a sales contract may choose the final quantum to be delivered within a range and default occurs prior to the exercise of said option. To determine the applicable loss perspective then requires the application of norms in addition to interpretation of the primary contractual rule. The bigger point is that legal controversies may arise in the process of defining ‘correct performance’ for the purpose of measuring damages.(3) Falkanger (1965), p. 173: “Both scenarios can be difficult to ascertain in context of damages, not only because of evidentiary issues, but also because difficult legal questions may arise” (translated). Another reason to extend analysis to include measurement principles is the existing discourse on the research problem, which relies in part on the application of such principles.(4) I.e., The Great Creation.