Determination of Damages from Breach of Contract

Sejal Makkad | Amity Law School, Amity University Chhattisgarh | 5th June 2020

Hadley vs Baxendale 

Facts: 

Plaintiffs owned a mill. The working of the mill was paused due to a crank shaft in an engine of the mill. The engine was decided to be sent to mechanics (Joycee) who was known was repairing such engines. The servant of plaintiff contacted the defendant, the one who did the work of carrier, who would transfer the broken engine to Joycee who was to make a new one with the help of old one. The plaintiff’s servant told the defendant that the engine was to repaired as soon as possible for resuming the work of the mill.

The defendant promised to transfer it in less than 24 hours. The defendant next day took the engine but did not transfer it and on time. Due to this, the mill did not reopen for a long time and the plaintiff suffered a huge loss.

Issue: 

Was the defendant liable for the loss of the plaintiff?

Judgement: 

The defendant was not held responsible for the loss caused to the plaintiff. The defendant was a non-breaching party in this case. Though the defendant promised to deliver the engine within a time limit but, it was not known to the defendant that non transferring will cause such a huge loss to the plaintiffs. The defendant was unaware of the fact that the whole working of the mill was dependant on that particular part. Also, the plaintiffs also did not try to contact the defendant for a long time for the same. There was a negligent act on the part of the plaintiff too.

Analysis: 

For holding a party liable for any loss or act, the party must be aware of the whole scenario and every fact related to it. It is essential for party to be aware for being guilty for that particular act.