CONTRACT LECTURE 13
C STRICKLAND
REMEDIES FOR BREACH OF CONTRACT
Track/slide 24
We can now consider two cases that explore the need for the loss not to be too remote from
the breach of contract.
The key cases here are Hadley v Baxendale 1854 and Victoria Laundry v Newman
Industries Ltd 1949.
In the Hadley case it was stated that a claimant can recover damages as follows:
i.
for losses that ‘occur naturally’ from the breach of contract –
‘normal loss’ – losses that must ‘inevitably’ have been in the contemplation of
the parties when the contract was made.
ii.
for losses other than normal loss where the loss can reasonably be supposed to have
been in the contemplation of both parties when the contract was made
We can see how this works in the Victoria laundry case.
The defendants had been contracted to deliver a boiler to the plaintiffs for immediate use in
the laundry. However, it was delivered 5 months late. The plaintiffs sued for loss of profits
for the late delivery. They were allowed to recover normal profits which came from the lack
of normal trade but were not allowed to recover the loss of profit of especially lucrative
contracts which the defendants had not known about when the contract was made.
Thus, to recover damages for more than just normal loss, the claimant must make the other
side aware of exceptional circumstances, such as special/very lucrative contracts that are
dependant on the contract with them. In this way, such loss will be in the contemplation of
‘both’ sides when the contract is made.