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Hadley v Baxendale [1854] EWHC Exch J70 Courts of Exchequer

The crankshaft broke in the Claimant’s mill. He engaged the services of the Defendant to deliver the crankshaft to the place where it was to be repaired and to subsequently return it after it had been repaired. Due to neglect of the Defendant, the crankshaft was returned 7 days late. The Claimant was unable to use the mill during this time and claimed for loss of profit. The Defendant argued that he was unaware that the mill would have to be closed during the delay and therefore the loss of profit was too remote.


Held:


The damages available for breach of contract include:

1. Those which may fairly and reasonably be considered arising naturally from the breach of contract or

2. Such damages as may reasonably be supposed to have been in the contemplation of both the parties at the time the contract was made.


If any special circumstances exists which were actually communicated to the Defendant, the Claimant may recover any damages which would ordinarily follow from a breach of contract under the special circumstances communicated.

 
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