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Hadley v Baxendale [1854] 9 Exh 341

By Oxbridge Law TeamUpdated 04/01/2024 07:00

Judgement for the case Hadley v Baxendale

KEY POINTS

  • Damages that are recoverable for a breach of contract are those that arise naturally from the breach or were reasonably foreseeable by the parties at the time the contract was made. 

  • If the damages were within the contemplation of the parties when the contract was formed, then they are recoverable. If the damages were special and not foreseeable, they are not recoverable unless the parties had communicated those special circumstances to each other at the time the contract was made.

FACTS

  • The plaintiff, Hadley & Anor, who were millers and mealmen, owned a steam mill that had a broken crankshaft of a steam engine that needed replacement. They ordered a new crankshaft from W. Joyce & Co. in Greenwich.

  • To complete the new shaft, the broken one had to be sent to Greenwich so that the new one could be properly fitted to the engine. The plaintiff, using the services of the defendants, Baxendale and Ors, had the broken shaft delivered to Greenwich.

  • The defendants promised to deliver the broken shaft to the destination within a specific timeframe. However, the defendants failed to deliver the broken shaft to Greenwich within the specified time, causing a delay of five days in completing the new shaft. This delay hindered the plaintiff's mill operations, preventing them from working, fulfilling orders, and making profits. As a result, the plaintiff claimed damages of £300.

  • The defendants pleaded non assumpsit (denial of the promise) to the first count and offered a payment of £25 into the Court as a settlement for the second count. The plaintiff dropped the first count and argued in response to the second plea that the amount paid into the Court was insufficient to cover their claim. This disagreement led to a legal dispute over the damages owed to the plaintiff for the defendants' failure to deliver the broken shaft in a timely manner.

JUDGEMENT

  • The court found for the defendant.

COMMENTARY

  • This case has since become a fundamental principle in the assessment of damages for breach of contract. It has been widely adopted and applied in common law jurisdictions and has guided courts in determining the recoverability of damages in various contractual disputes. The case has had a lasting impact on contract law and continues to shape the way damages are awarded in breach of contract cases.

ORIGINAL ANALYSIS

  • Plaintiff operated a mill and paid Defendant to deliver a faulty part to an engineer by a certain time. Defendant failed to do so and Plaintiff lost some business as a result. 

  • The court held that the harm was too remote to be claimed on.

  • For a plaintiff to claim damages for harm caused by Defendant, the harm would have to be generally foreseeable to Defendant. In this case, Defendant could not have foreseen the loss of profits that might come as a result of his failure to deliver the faulty part on time and hence he was not liable (though this would not have been the case had Plaintiff explained his special circumstances. 

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