Hadley v. Baxendale
Hadley v. Baxendale is a landmark case in contract law from 1854 that established important principles regarding damages for breach of contract. The case involved a mill owner, Hadley, who sued a carrier, Baxendale, for failing to deliver a broken mill shaft on time. The court ruled that only damages foreseeable at the time of the contract could be recovered. This means that parties can only claim compensation for losses that both sides reasonably anticipated when making the agreement, highlighting the importance of clear communication about expectations in contracts.
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Hadley v Baxendale is a landmark case in contract law, decided in 1854. It established the principle of consequential damages, which are the losses a party can claim if a contract is breached. In this case, a mill owner (Hadley) sued a carrier (Baxendale) for not delivering a broken mill shaft on time, resulting in loss of profits. The court ruled that Baxendale was not liable for the lost profits, as he was not aware of the shaft's critical importance. This case clarified that damages must be foreseeable and directly linked to the breach for compensation to be awarded.