Distinguish Business Exceptions from Technical
There are basically two reasons that things go wrong at runtime. Either there is some technical problem or there is some reason related to business logic that we cannot proceed. Most modern languages, such as LISP, Java, Smalltalk, and C#, use exceptions to signal both these situations. However, the two situations are so different that they should be carefully held apart. It is a potential source of confusion to represent them both using the same exception hierarchy, not to mention the same exception class.
When an irresolvable technical problem occurs, there is usually not much the calling client code can do about it. For example, if you make a call to some library code resulting in an attempt to access array element 83 from an array of size 17, then the program is clearly off track and the library code will throw some kind of index-out-of-bound exception. As a client there's not much that can be done with these kinds of exceptions at runtime — if you knew the array was too small, you wouldn't have made call in the first place.
Instead of catching and handling irresolvable situations, we probably let the exception bubble up to the highest architectural level and let some general exception handling mechanism do what it can to ensure the system is in a safe state, such as rolling back a transaction, logging and alerting administration, and reporting to the user in some polite manner.
A variant of this situation is when you are sitting in the "library situation" and realise that the client calling your code has made a mistake. E.g., your method might have been called with a totally bizarre argument, or the caller might have not made the proper setup of a dependent object. This is a code defect on a par with trying to get the 83th element from 17. The caller should have checked, and not doing so is a breach of your method's contract and a programmer error on the client side. The proper response is to throw an illegal-argument or illegal-state exception.
A different, but still technical, situation is when the program cannot proceed due to some deficiency in the runtime environment, for example, if a necessary database does not respond. In this situation you must assume that the infrastructure has done what it can to try to resolve the situation, e.g., repairing connections and retrying a reasonable number of times. Even if the cause is different, the situation for the calling code is similar: there is little it can do about it. So, we signal the situation through an exception that we let bubble up to the general exception handling mechanism.
In contrast to these, we have the situation where you cannot complete the call for a domain-logical reason. In this case we have encountered a situation that is an exception, i.e., unusual and undesirable, but not bizarre or programmatically in error. For example, if I try to withdraw money from an account with insufficient funds. In other words, this kind of situation is a part of the contract, and throwing an exception is just an alternative return path that is part of the model and that the client should be aware of, take into account, and be prepared to handle. For these situations it is suitable and advisable to create a specific exception or a separate exception hierarchy so that the client can precisely catch and handle the situation.
Mixing technical exceptions and business exceptions in the same hierarchy blurs the distinction and confuses the caller about what the method contract is, what conditions it is required to ensure before calling, and what situations it is supposed to handle. Separating the cases gives clarity and increases the chances that technical exceptions will be handled by some application framework, while the business domain exceptional situations actually are considered and handled by the client code.
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