Hadley v Baxendale (1g54

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Thereare two limbs to the principf"
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of
to
for "'*p,r-'ti*':r's*,i'l+*ni,i,$ifl
(1) The first apnlies when th. "nun.iut.O

hisprovinglt-.
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i n4adlelvBaxendale:

euvrrrussrsrecoverabtiiyiiifpil?X#irifiJl:3
\
 BUSNESS LAW N{ MALAYSIA

'unusual' loss, ie,lossover and beyond that

. (2)
'-' The secondlimb dealswith
[ -iring naturally from the breacL.The unusuallossnormally o^ccurs asa
lt ,.iuiioispecial circumstances. The secondlimbof Hqdleyv Baxendale
i hotar that such unusualloss is recoverableonly where such.special
J circumstances were madeknown to the party in defaultaf the tlme the
I contractwas made.If the defendant'sattentionwas not drawn to such
| ;d;ili circumstanceswhen the contractwas made,the plaintiff cannot
l ri:coversuchsPecialloss.
A casethat illustrates both the limbs of Hadley v Baxendale and re-examinesits
formulation is Victoria Laundry (Windsor) Ltd v Newman Industies ltd sum-
marisedbelow.

Victoria lnundry (Windsor) Ltd v Newman Industries Ltd

U949)2 KB 528; [1949] All ER 997
Facts:
The plaintiff laundry company contracted to buy from the defendant a boiler to be
its business.The defendant knew at the time the contract was made that
"."a'in
the olainriff was engaged in the businessof a launderer and dyer. The defendant
uho'ko.* that the foiler *as requiredfor the plaintiff's businessand that it was
i.q"*O for immediareuse.Delivery, whichshould have occurredin June,did not
u.r'Jtu occur unril November(a 2[-week delay).The plaintiff suedfor the nor-
-ut ot6fitr that would have been eamed had the boiler been delivered on time and
for tLe loss of profits it should have made on some highlylucrative dyeing con-
'new' boiler.
tt*t, it had negotiatedthinking that it would have the use of the
Held:
Although the defendantshad clearly been told that the plaintiffs wanted theboiler
,immediately', the laundry company was entitled to recover oniy the
i;;;"ii"A
front, ttrut would have been madein respect of its ordinary laundry and dyeing^
ivork but not in respect of the dyeing contiacts it expected to obtain as a result of
the installation of the boiler. Newman's should have toreseen that the tormer
-
would be lost but could not have foreseenthe latter would be such work was out-
riA" tfrut done on a day to day basis by laundries and thus was unforeseeable'In
'ioss of profits' 6n the special dyeing jobs, the defendants
;;dJ; recover the
the
would have had to know, at tie time of their a-greementwith the plaintiffs, of
prospectivecontractand its terms.

clarified
In Victoria htandry (windsor) Ltd v Newman Industries Ltd, it was
that:
(1) The.purposeof damagesis to-restorethe aggrievedparty to the same
Dos il ;; ;;; ;: ut'i Li3?i gh
rson,,o, - u"t'#Jff tt t'ia-u-ttnobserved'
-aggrieved
tiil;.1;**l"ti"" id ;gG; br;"ch..the p""v^
i",tl3:
mattsr
entitled to recover damages for any and all loss and damage'.no
;;*' ilp;"b^r;;; t-h;;";;pt.ai iiuur The aggrievedpaitv is entitled
".
:i;ffi*"",1^';*Jlto1l,lfi,t*xtt,X,ri#;l"r:*m,"'*
breach.
' on t4e
f2) What was at that time reasonably. foreseeabledependspafty fi
by
knowledgethen possessed the parties.or at least' by tne
breach.
(:)fortlrer!3H?i""'^""f ff%:?3ili3Tii;i"il";;
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'imputedtand'actual'.
individualcanbe assumed to know,the.:'9::Pt?l$ti
;l'lhift:Y"#;"i;'; J';;;'; t i, r.!i"ffi i"'i!,I Ili{",:,* :li ,{fif "?
Anyreasonable
o f t h i n g s ' a n d t o b e a w a r e o f t n e l o s s t n a [ l s l l a D l e t ( r l t r ) u r l ltrno
::"; ^(
-
;;";;h ?i .onituit in tttuioiain-y course..This is what the,first
i# i'ilf iTbl1""' ,^:l*"11"';"il
v Baxendate."i#':'+frJ
Hadtey
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354