The rule as stated in Hadley v Baxendale has two parts (as indicated by the numbers in the square brackets in the above quotation). The first limb – loss of a type ordinarily and naturally arising from the breach – is based on imputed knowledge rather than the actual knowledge of the parties. Everyone is taken to know what happens in 'the usual course of things' and, consequently, what loss is liable to result from a breach of contract in that 'usual course'. If the loss is deemed a normal type of loss which would follow from the breach then it will be recoverable under the first limb of the Hadley v Baxendale test.