Site navigation

Principle: An injured party may recover those damages reasonably considered to arise from a breach of…

Under Hadley v. Baxendale, a party is liable only for losses within the parties' reasonable contemplation; Q was not told the mill would remain inoperable until the new…

Choose your answer

Principle: An injured party may recover those damages reasonably considered to arise from a breach of contract or those damages within the reasonable contemplation of the parties at the time of contract.Facts: A shaft in 'P's mill in NOIDA broke rendering the mill inoperable. 'P' hired 'Q', a transporter, to carry the broken shaft to an Engineering Workshop in Gurgaon so that he could make a duplicate shaft. 'P' told 'Q' that the shaft must be sent immediately and 'Q' promised to deliver it the next day. 'Q' did not know that the mill would be inoperable until the new shaft arrived. However, 'Q' due to his negligence did not transport the shaft as promised, causing the mill to remain shut down for an additional five days. 'P' had paid Rs.2000 to 'Q' towards transportation. 'P' sues 'Q' for Rs. 30,000 as damages due to lost profits and wages. What is the liability of Q'.

Select one answer
Answer and explanation

Correct answer D

Under Hadley v. Baxendale, a party is liable only for losses within the parties' reasonable contemplation; Q was not told the mill would remain inoperable until the new shaft arrived, so the lost profits were special damages outside his contemplation, and "'Q' is not liable to pay the entire damages as claimed by P, because at the time of entering into the transportation contract, 'Q' did not know about the possible nonfunctioning of the mill".

Practice for these exams

Related question papers

Related exam syllabi

Related questions in this topic