Hadley V. Baxendale Essay

2258 words - 9 pages

Case CommentHadley v. BaxendaleIndex



Case Brief
Facts of the Case
Procedural History
Questions of Law
Analysis of Ratio Decidendi


IntroductionContract Law like other laws is not a stagnant legislation. It has evolved over the time with changing social life and circumstances. In a common law country where legislature makes a law, the judiciary plays a significant role in the interpretation and application of the law to the facts and circumstances of a case. The ratio decidendi of a court acts as a precedent for the subsequent cases. Therefore, the contract law is structured by legislations as well as judicial precedents.The most interesting and ambiguous aspect of the contract law is the 'damages awarded by the court for the loss suffered by parties to a contract'. The reasoning followed by the court in awarding the damages to a party is manipulated by different circumstances of each case which becomes a precedent for future litigation.I have opted to critically analyse a famous English case Hadley v. Baxendale, which is the cornerstone for the analysis and awarding of consequential damages, which entails that a party to a contract may often lack the knowledge of the value of performance of the contract, unless the same is communicated by the other party to the contract.I will first briefly explain the entire case and then analyse the judgement of the Court of Exchequer. Then I will be concentrating on the rule of reasonable foresight and contemplation by the parties to the contract. I would then comment on the ratio decidendi established by the court in Hadley v. Baxendale.Case Brief2.1 Facts of the CaseThe plaintiff had a business of millers in Gloucester, and on May 11 their mill was shut down due to the breakage of the crankshaft by which the mill was operated. The steam engine of which it formed a part was manufactured by Messrs. Joyce and co. based at Greenwich. The reason for the breakdown of the steam engine that was the fractured crank shaft was discovered on the 12th of May and on the 13th of May the plaintiffs sent one of its employees to the office of the defendants, who were the carriers trading under the name of Pickford and co. for the purpose of the dispatching the broken crank shaft to Greenwich.The employee of the plaintiff on the handing over the possession of the shaft to the clerk of the defendants told him that the mill was stopped and the shaft should be transported immediately. The clerk reassured him that if it was sent up by 12 noon any day, it would be delivered in Greenwich the subsequent day. On the 13th of May the defendants took the broken shaft in their possession. Due to the neglect and procrastination of the defendants the delivery of the shaft was delayed by days together. Due to the delay of the delivery the plaintiff incurred losses in profits which they would have received otherwise.2.2 Procedural History of Hadley v....

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