Reconsidering Transferred Loss

Abstract

The Supreme Court's recent reconsideration of the ‘transferred loss’ exception stopped short of clarifying why it is justified at all. The usual candidates are that it applies to loss transferred with property, or operates more broadly to vindicate the claimant's interest in performance. This note suggests that neither is a sound basis for the rule, and that the promisee ought generally to be entitled to sue for loss suffered by third parties, but is obliged to pass on the damages he recovers.