Hadley v Baxendale is an 1854 decision of the English Court of Exchequer that established the foundational rule on remoteness of damages in contract law. A mill shaft broke, forcing Hadley to send it away for repair, and he engaged the carrier Baxendale to transport it, but the carrier delayed delivery, extending the mills shutdown and increasing Hadleys lost profits. The court held that a party in breach of contract is liable only for losses that arise naturally from the breach, or that both parties could reasonably have contemplated at the time of contracting as a probable result of a breach, and that Baxendale had not been told the mill would be idle without the shaft. The rule that damages must be foreseeable in this sense remains the starting point for assessing contract damages across the common law world.
Facts
Decision Year Decision Date HoldingA breaching party is liable for all losses the contracting parties should have foreseen from the breach; where the non-breaching party has special knowledge the breaching party lacked, the breaching party is liable only for losses foreseeable on the information actually available to it. 2 Current StatusRemains the leading rule in English contract law for determining which consequential damages are recoverable after a breach. 2 Case Status
Case Status (category) Connections
Decided By
Source Hadley v Baxendale (Wikipedia)
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Sources
1. Wikidata: Hadley v Baxendale
Source: sets the leading rule for consequential damages in contract lawView the Source 2. Hadley v Baxendale (Wikipedia)
WikipediaLead section, opening sentence
Hadley & Anor v Baxendale & Ors [1854] EWHC J70 is a leading English contract law case.
Lead section, second sentence
It sets the leading rule to determine consequential damages from a breach of contract: a breaching party is liable for all losses that the contracting parties should have foreseen. However, if the other party has special knowledge that the party-in-breach does not, the breaching party is only liable for the losses that he could have foreseen on the information available to them.
Introduction
Hadley & Anor v Baxendale & Ors [1854] EWHC J70 is a leading English contract law case. It sets the leading rule to determine consequential damages from a breach of contract: a breaching party is liable for all losses that the contracting parties should have foreseen.
Infobox, date decided field
23 February 1854
- Decided By: Exchequer of Pleas, Infobox court field: Exchequer Court
In Group: Frustration and Damages Cases, Introduction, sentence 2
It sets the leading rule to determine consequential damages from a breach of contract: a breaching party is liable for all losses that the contracting parties should have foreseen.
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