Case Analysis Of Hadley V. Baxendale

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Hadley v. Baxendale demonstrates an example of a buyer denied relief due to special circumstances. The plaintiffs, Hadley, operated as millers in Gloucester Assizes. On May 11th, production halted due to a break in the crank shaft. The plaintiffs hired the defendants, Baxendale, to deliver the broken shaft to the engineers in Greenwich whom had originally manufactured the machinery. The broken shaft was to act as a pattern for the construction of a new shaft. The defendants agreed to collect the broken shaft before noon and delivery the item to Greenwich on the following day. The item was collected on time, however it was delivered late to Greenwich. The plaintiff did not receive the new shaft until five days after promised. During this time, …show more content…
The plaintiff sued Baxendale for relief of the lost profits. At trial court Hadley was awarded damages based on the lost profits. On the ground of misconduct, the defendants appealed the case. The question at hand was whether or not the defendant should be liable for lost profits had the special circumstances of the profits never been communicated.


Should the defendant, Baxendale be held liable for the damages the plaintiff, Hadley suffered due to the extra five day shut down. The first step that a court takes in choosing a remedy is to decide what interest it is trying to protect. An interest is a legal right to something, there are four interests; expectation, reliance, restitution, and equitable interest. In this case an expectation interest view is used to decide on a remedy. This refers to what the injured party reasonably thought they would get out of the contract. The goal of the court in this scenario is to put the injured party in the position they would be in if both parties had fully performed
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Baxendale appealed the case and, “The court ordered a new trial in which the jury would not be allowed to consider the plaintiff's lost profits” (Beatty, & Samuelson, 2015 p.408). This is because Baxendale could not have foreseen the lost profits resulting from the shipment being late. In the next buyer's remedy case, where the jury could not be made aware of lost profits Hadley will not be awarded the same amount as before. Due to the above analysis Hadley will be awarded the monetary amount only associated with the breach of the late shipment contract and not the total cost of lost profits. Baxendale could not have foreseen the consequential damages therefor can not be held liable for them. In this case it crucial for the buyer to explain the special circumstances during the time of the contract, in order to have been able to claim

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