Hadley v Baxendale (1854) 9 Ex 341
- casetreasury
- Aug 4, 2024
- 2 min read
Facts: A flour miller, the plaintiff (P) had a mill with a broken crankshaft and made a contract with the defendant (D) to deliver the repaired machine part. Due to a 5-day delay in the delivery of it by D, P suffered loss of profits for those 5 days.
Held: D was not liable for P’s loss of profits. Neither general or special damages applied. Re general damages, D only knew that P was a flour miller and that there was a broken machine part. A carrier might expect that a business would own a spare millshaft, so the loss of profits from the delay was not something that arose in the usual course of things. Additionally, P did not communicate to D that the part was a special part of the machine. P needed to tell D this at the time the contract was formed so that D was aware of the consequences of breach.
Held (Anderson B): “Where two parties made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, that is, according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.”
Rule:
First limb (‘general damages’ for usual loss): loss arising naturally from the breach, ie according to the usual course of things; or
Second limb (‘special damages’ for unusual loss): such as may be reasonably supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of breach