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Hadley v Baxendale [1854]

Facts

  • Contract to transport mill crankshaft to and from repair centre breached as took too long

Issue

  • Could damages be awarded for loss of profits?

Decision

  • No

Reasoning

  • Defendant did not know that mill did not have spare crankshaft
  • Damages are limited to those which flow reasonably from the contemplation of the parties in the natural course of things, or from special communicated circumstances
  • No special circumstances were communicated
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