Hadley v. Baxendale (case)

Hadley v. Baxendale (1854) is a foundational contract law case that established how damages are awarded when a contract is broken. The court decided that for damages to be recoverable, they must be reasonably foreseeable by both parties at the time of contract formation. In the case, a miller’s crankshaft was delayed in delivery, causing the mill to shut down. The supplier, Baxendale, wasn't aware this would cause such harm. The court ruled that damages should only cover losses that both parties could foresee, setting a key standard for assessing breach of contract damages.