Hadley v Baxendale case brief + full opinion

here you will see Hadley v Baxendale case brief.

Hadley v Baxendale is a landmark case in English contract law.

Hadley v Baxendale case established the rule for determining the special damages in breach of contract claim.

The case is frequently taught to first-year law students as part of their contract law course.

Here I will share with you the Hadley v Baxendale case brief to help you understand everything you need to know about the Hadley v Baxendale case in a simple and accurate way.

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Hadley v Baxendale case brief

Hadley v Baxendale (1854) 9 Exch 341

Decided on 23 February 1854

by

Alderson, B., Exchequer Court

Parties

Hadley & Anor are Plaintiffs and Baxendale & Ors are defendants.

Procedure

Plaintiffs sued defendants for damages based on breach of contract trial. At the trial before Crompton, J., at the last Gloucester Assizes, Hadley won and was awarded damages of £50.

Baxendale appealed to Exchequer Court, contending that Hadley did not deserve the damages. Exchequer Court ordered a retrial.

Facts

The Plaintiffs, Mr. Hadley, and Anor were millers and mealmen who owned and operated the City Steam Mills.

Hadley arranged for a replacement crankshaft to be constructed by W. Joyce & Co. in Greenwich for a steam engine at the mill that had broken.

W. Joyce & Co. wanted the broken crankshaft to be shipped to them before the new crankshaft could be built, in order to assure that the new crankshaft would fit with the other parts of the steam engine.

Hadley agreed to transfer the crankshaft to engineers for repair by a particular date with defendants Baxendale and Ors, who were trading as common carriers under the name Pickford & Co.

Hadley lost business because Baxendale failed to deliver on the specified date. Hadley filed a lawsuit to recover the profits he lost as a result of Baxendale’s late delivery.

Issue

Whether the defendants would be liable for the damages that they were not aware would be incurred from a breach of the contract.

Rule

The innocent party is entitled to be compensated for the damages that are only reasonably foreseeable and arise naturally from the breach of contract.

Reasoning

When applying the facts to the rule, the court reasoned that although Defendant’s breach was the direct source of the Plaintiffs’ lost profits, under normal circumstances, such loss cannot be said to arise naturally from their breach.

Also, the fact that a party is sending something to be fixed does not mean that if it is not delivered on time, the party will lose money.

The court adds further, the Defendants had no way of knowing that their breach would result in a longer mill closure and a loss of profits.  Furthermore, the Plaintiffs never informed the Defendants of the unusual circumstances, and the Defendants were unaware of the special circumstances.

Holding

No, a person can only be liable for the damages that are reasonably foreseeable and arise naturally from the breach.

Judgment

The court ordered a retrial.

Obiter dictum

The court alternatively stated that If the plaintiffs communicated the special circumstances under which the contract was made to the defendants, and both parties were aware of them, the damages resulting from a breach of such a contract, which they would reasonably contemplate, would be the amount of injury that would ordinarily follow from a breach of contract under these special circumstances.

Read the full Judgement here

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