Hadley v Baxendale

Hadley contracted with defendants Baxendale and others to deliver the crankshaft to engineers for repair by a certain date at a cost of £2 sterling and 4 shillings.

L. Fuller and William R. Perdue evaluated the idea of reducing contractual remoteness to foreseeability in this way: Hadley v Baxendale may be regarded as giving a grossly simplified answer to the question which its first aspect presents.

To the question, how far shall we go in charging to the defaulting promisor the consequences of his breach, it answers with what purports to be a single test, that of foreseeability.

In the first place, it is openly branded as inappropriate in certain situations where the line is drawn much more closely in favor of the defaulting promisor than the test of foreseeability as normally understood would draw it.

345, ever since considered a leading case on both sides of the Atlantic, and approved and followed by this court in Telegraph Co. v. Hall, above cited, and in Howard v. Manufacturing Co., 139 U.S. 199, 206, 207 S., 11 Sup.

Ct. 500; Baron Alderson laid down ... the principles by which the jury ought to be guided in estimating the damages arising out of any breach of contract[.

[5] In Satef-Huttenes Albertus SpA v Paloma Tercera Shipping Co SA (The Pegase) [1981] 1 Lloyd’s Rep 175, Robert Goff J stated, Although the principle stated in Hadley v Baxendale remains the fons et origo of the modern law, the principle itself has been analysed and developed, and its application broadened, in the 20th century ...

James Edelman, a Justice of the High Court of Australia gave a speech on the topic,[7] asserting that "the rule set out in Hadley v Baxendale was not novel".

For example, Edelman noted that, in 1564, the French jurist Charles Dumoulin had argued that liability for breach of contract should be limited to foreseeable damage,[8] thereby pre-dating this same sentiment in Hadley v Baxendale.