What is the standard of review for a claim for damages under a contract where damages were reasonably foreseeable?

MultiRegion, United States of America

The following excerpt is from Bergerco, U.S.A. v. Shipping Corp. of India, Ltd., 896 F.2d 1210 (9th Cir. 1990):

We held in United States v. McConney that de novo review is usually appropriate for decisions applying a rule of law to the facts. 728 F.2d 1195 (9th Cir.) (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). However, we noted that a clearly erroneous standard of review is more appropriate for certain types of mixed questions. Where the legal standard calls for a "strictly factual test," for example, state of mind, "the application of law to fact ... involves an 'essentially factual' inquiry" which warrants deference to the trial court's decision. Id. at 1203 (citation omitted). In this case we must decide what damages were "reasonably foreseeable" at the time the agreement was formed, a determination which primarily depends on what the parties said, did and understood when making the contract. We conclude that the foreseeability of a certain type of damage is the sort of "essentially factual" inquiry which should be reviewed under the clearly erroneous standard.

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