Proximate Cause: Definition, Example and Related Terms
What is a Proximate Cause ?
Proximate cause is a legal concept that helps figure out if the damage or harm that happened was directly caused by a person's action, or if something else actually caused it. To explain it in simpler terms, let's imagine you're playing a game of dominoes. You push the first one, and it knocks down all the others. In this case, you pushing the first domino is the proximate cause of all the dominoes falling down. Now, let's apply this to business contracts. If something goes wrong in a deal because of something you did, and it causes a chain reaction of other things going wrong, then you might be found to be the proximate cause of those problems.
But it's not always that simple. Sometimes other factors can come into play, and it's up to the courts to decide who or what is the proximate cause.
Example(s)
Scenario Description Suppose a shipping company contracts to deliver a company's goods to a certain location by a particular date. However, due to the shipping company's negligence, the goods arrive late, causing the company to lose a major business deal. In this case, the shipping company's negligence could be viewed as the proximate cause of the company's loss. Because their action (or lack of action) set off the chain of events leading to the loss, they could be held legally responsible. A manufacturer contracts with a supplier for a specific type of material. The supplier delivers a different material, and as a result, the manufacturer's product fails, causing financial loss. The supplier's delivery of the wrong material is the proximate cause of the manufacturer's loss. Because their action directly led to the product failure and subsequent loss, they could be held legally responsible.