Hadley v Baxendale, Facts, Issue, Decision, Limbs

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This case is concerned with the Damages for the breach of contract in contract law

Facts of Hadley V Baxendale

A Shaft broke in claimant’s mill. The Claimant hired the Defendant for the repairing services. It was Agreed by the defendant carriers that they will carry the shaft to Greenwich so that it could be used as a pattern in the manufacture of a new shaft.

As the Defendant delayed the process which resulted in the breach of contract, Due to the delay in process the production was halted at claimant’s mill. The Claimant Sought to recover their loss of profits as damages for breach of contract .

As the defendant  argued that he was not aware that delaying the process would result in mill closure and no such discussion was made before the contract.

Issue:

Whether the defendant was liable to pay the loss of profits for mill closure?

Decision:

The Decision came into the favour of the Defendant as the claimant didn’t told him that delaying the process would cause him loss. So the Defendant was not liable to pay damages

Key points to remember of Hadley v Baxendale ( or Limbs)

There was a two point test in this case to claim the Damages for the Breach of Contract

1- The Defendant is liable for losses that occur “naturally” or as a result of the “usual course of things” after the breach of contract

2- The defendant may be liable for losses which did not arise “naturally” but were with the reasonable contemplation of both parties at the time they made the contract.

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