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Hadley v Baxendale [1854] EWHC J70

Facts:

P owned a mill and sent broken shaft to D for pattern new one. Shaft delivery to D was delayed, therefore final delivery of new shaft to P was delayed. P brought suit against D for lost profits from mill not operating

Issue(s):

What damages, if any, should the plaintiff be awarded?

Ratio:

When a contract is breached damages should be what the two parties who have reasonably contemplated them to be.
**In the case of special circumstance, both parties must be aware of the circumstance for a breach to amount to damages that would ordinarily flow from a breach of these special circumstances.
***Contemplation depends on what was communicated - knowledge

Comments:

Test for Remoteness:
1. Did damages arise naturally from the breach?
2. Was it in reasonable contemplation of the parties as the probable result of the breach? (Forseeability plus probability)
3. Special circumstances communicated?


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