What is the test for mental distress in a breach of contract case?

Alberta, Canada


The following excerpt is from Kempling v. Hearthstone Manor Corporation, 1996 ABCA 254 (CanLII):

My conclusion is that the determination of a claim for mental suffering or distress in a breach of contract suit must begin with the application of the rule in Hadley v. Baxendale. The rule has within it the means to test and limit liability where the claim arises through special circumstances, which will be the usual case with mental suffering or distress. The contract must be made on the basis of those special circumstances being known to the parties and the plaintiff having communicated them to the defendant. Also, the plaintiff bears the further burden of having to prove the causal link between the breach and the mental suffering or distress and foreseeability of that injury. Damages would be restricted to those that “would ordinarily follow from a breach under the special circumstances so known and communicated.” A breach of contract will often result in unhappiness, frustration, inconvenience, anger and even malevolence. The rule is not intended to assure compensation in those cases. The rule allows a court to award damages but does not mandate doing so. Analysis

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