Written by attorneys · grounded in primary & secondary sources — see below
2 senses
1
in personal jurisdiction
A principle holding that the mere possibility a product sold elsewhere might enter the forum state does not create sufficient contacts for personal jurisdiction over an out-of-state defendant. Jurisdiction requires purposeful availment of the forum's market or protections rather than unilateral consumer movement of the product.
2
Sense 1
1
in personal jurisdiction
A principle holding that the mere possibility a product sold elsewhere might enter the forum state does not create sufficient contacts for personal jurisdiction over an out-of-state defendant. Jurisdiction requires purposeful availment of the forum's market or protections rather than unilateral consumer movement of the product.
Sources & Authorities· 1 primary source
Select any source to read its text and confirm it supports the definition.
Cases
Sense 2
2
in contract remedies
A limitation on consequential damages that bars recovery for losses the breaching party did not have reason to foresee as a probable result of the breach at the time of contracting. The rule focuses on knowledge communicated during negotiations and distinguishes ordinary-course losses from those arising under special circumstances known to the defendant.
Examples1
Late Refrigerated Trailers and Lost National Contract
Central Shipping agreed to deliver five refrigerated trailers to West Dispatch by November 1. West Dispatch had explained during negotiations that the trailers were needed to perform an existing holiday contract and to secure a new national supply contract beginning in December. When Central Shipping delivered late and two units had defective refrigeration, West Dispatch lost the national contract. The court permitted recovery of those consequential damages because Central Shipping had reason to foresee the loss at contracting.
A limitation on consequential damages that bars recovery for losses the breaching party did not have reason to foresee as a probable result of the breach at the time of contracting. The rule focuses on knowledge communicated during negotiations and distinguishes ordinary-course losses from those arising under special circumstances known to the defendant.
Each sense below has its own examples, sources, and questions.
Examples1
Out-of-State Retailer and Forum Accident
Freeman Engineering sold a component part to a wholesaler in State X. A consumer later purchased the finished product in State X and drove it to State Y, where the part failed and caused an accident. When the injured driver sued Freeman Engineering in State Y, the court dismissed for lack of personal jurisdiction because the company had not purposefully directed any activities toward State Y and the consumer's unilateral travel supplied the only connection.
Frequently Asked1
Is mere foreseeability that a product might reach the forum state enough for personal jurisdiction?+
No. A forum may not exercise jurisdiction over a defendant whose only connection is that a product it sold was taken into the forum by a consumer. The defendant must have purposefully availed itself of the forum's market or protections.
Supporting sources
Frequently Asked2
Does disclosure of a buyer's specific needs during negotiations satisfy the foreseeability requirement for consequential damages?+
Yes. When a buyer explains during contract talks that particular equipment is needed to secure and perform a new national supply contract, the seller has reason to know the loss is a probable result of breach. The rule focuses on probable consequences at the time of contracting rather than requiring quantification of the exact scale of loss.
How does the foreseeability rule interact with the requirement of reasonable certainty in proving lost profits?+
Foreseeability determines whether a category of loss is recoverable in principle, while certainty governs whether the amount of that loss can be established with reasonable certainty. A loss may be foreseeable yet still unrecoverable if the plaintiff's projections lack sufficient historical data or other objective evidence to permit a reasoned estimate.
476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986)Torts
…result of the breach. In a warranty action where the loss is purely economic, the limitation derives from the requirements of foreseeability and of privity, which is still generally enforced for such claims in a commercial setting. In products-liability law, where there is a duty to the public generally, foreseeability is an…