Damages For Breach

Hadley v Baxendale (1854)

Presented By:-
Deepika Saraogi
Gautam Singh
Bani Pasricha
Deepak Aggrawal
Dilip Singh
 The Case
Parties:
Plaintiff - Hadley
Defendant – Baxendale
Hadley, operated a mill. The crankshaft of the
mill broke, forcing the mill to shut down.
Hadley contracted with Baxendale, to
deliver the crankshaft to engineers for repair
by a certain date. Baxendale failed
to deliver on the date in question, causing
Hadley to lose some business.Hadley
sued for the profits he lost due to Baxendale's
late delivery.
The jury awarded Hadley damages of £25.
Baxendale appealed, contending that he did
not know that Hadley would suffer any
particular damage by reason of the late
delivery.

Issue
What is the amount of damages to which an
injured party is entitled for breach of
contract?
 Breach of Contract
● The failure, without legal excuse, to perform an
obligation or duty in a contract.
● Breach of contract from one party leads to
discharge of contract from the other party.
● Two types:
- Actual Breach
- Anticipatory Breach
 Damages
● Monetary compensation for the loss caused to
injured.
● General Damages: Loss which arises naturally in
the usual course of things from the breach itself.
● Special Damages: Loss which arises on account
of unusual circumstances affecting the plaintiff. It
is not recoverable unless it has been brought to
the knowledge of defendant.
 REASONING
In this case, however, the court stated: "the loss
of profits here cannot reasonably be considered
such a consequence of the breach of contract as
could have been fairly and reasonably
contemplated by both the parties when they made
this contract."
 CONCLUSION
The rule of the case stands for placing the risk of loss
on the party in the best
position to handle it. In the business world, there is no
reason to suspect that
courier companies would have superior knowledge of
milling operations whereas the mill owner likely has a
better chance to estimate and
hence avoid loss (say by having a spare or agreement
with other cooperating
businesses that use cranks and shafts). Therefore,
denying compensation if the courier is not informed
avoids shifting the costs of loss reduction and
prevention.
THANK YOU