Baxendale 1854 Chapter 6: Negligence: The Expectation Measure Part 2: Remedies for Breach of Contract Sect 4: Youth: Foreseeability FACTS: • P’s Mill, Hadley’s, stopped working due to the breaking of a shaft. P K’ed with D, Baxendale, to transport the piece from P to the engineer in order for the piece to undergo the necessary repairs. • D took longer than agreed to deliver the piece b/c of neglect, delaying its reparation, which resulted in lost profits for P. P sued trying to recover damages for breach of K, and to recover the lost profits. PROCEDURE: ISSUE: HOLDING: Jury awarded P 25 pounds, D appealed argued that P should not be entitled to recover which were not foreseeable by D at the time of the K. Can P recover lost profits, even when the lost of such profits was not foreseeable by D at the time of the K? No, P is not entitled to recover lost profits because such lost profits were not foreseeable and were not discussed between P and D at the time of the K.

REASONING: • Court promulgated a new rule: Now we think the proper rule in such a case as the present is this: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i e, according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. • Given that P could have possessed a replacement shaft, or that the Mill was defective due to another reason in addition to the shaft, the context of the case did not warrant an interpretation in which D understood that by not performing in their delivery, P was subject to an inoperable Mill and thus lost profits. DISPOSITION: New Trial.

DISSENT: None. ______________________________________________________________________________ CLASS NOTES:

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