Hadley v Baxendale (1854) 9 Ex. 341 is a famous case in the common law of contracts, which is still taught in law schools throughout the common law world. It's two limbs are authority for how to determine the remoteness of damages when a breach of contract has occurred. Remoteness means how foreseeable the damages would have been to the breaching party.
The Facts in Hadley v Baxendale
The plaintiffs were the owners of a flour mill in Gloucestershire. They sent a broken iron shaft to an office of the defendants, who were common carriers. The shaft was to be conveyed by them to engineers in London. The defendants' clerk, who attended at the office, was told that the mill was stopped, that the shaft must be delivered immediately, and that a special entry, if necessary, must be made to hasten its delivery. The delivery of the broken shaft to the London consignees, to whom it had been sent by the plaintiffs to serve as a pattern with which to make a new shaft, was delayed for an unreasonable time. In consequence of this, the plaintiffs did not receive the new shaft for some days after the time they ought to have received it, and they were consequently unable to work their mill because they did not have the new shaft. Because of this, they incurred a loss of profits. The court held, that, under the circumstances, such loss could not he recovered in an action against the defendants as common carriers.
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