Facts

The claimant, Hadley, owned a mill featuring a broken crankshaft. The claimant engaged Baxendale, the defendant, to transport the crankshaft to the location at which it would be repaired and then subsequently transport it back. The defendant then made an error causing the crankshaft to be returned to the claimant a week later than agreed, during which time the claimants mill was out of operation. The claimant contended that the defendant had displayed professional negligence and attempted to claim for the loss of profit resultant from the unexpected week-long closure. The defendant retorted that such an action was unreasonable as he had not known that the delayed return of the crankshaft would necessitate the mills closure and thus that the loss of profit failed to satisfy the test of remoteness.

Issue

Whether the loss of profits resultant from the mills closure was too remote for the claimant to be able to claim.

Held

The Court found for the defendant, viewing that a party could only successfully claim for losses stemming from breach of contract where the loss is reasonably viewed to have resulted naturally from the breach, or where the fact such losses would result from breach ought reasonably have been contemplated of by the parties when the contract was formed. As Baxendale had not reasonably foreseen the consequences of delay and Hadley had not informed him of them, he was not liable for the mills lost profits.

The Court of Appeals concluded that the carrier (Baxendale) was only liable for foreseeable damages. Asking a carrier to rush does not make the carrier liable for every consequence of the breach. Do you agree or disagree? Explain your reasoning.