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Hadley v. Baxendale

Court of Exchequer
156 Eng. Rep. 145 (1854)

Written by Megan Petersen, JD

Facts

Joseph and Jonah Hadley (collectively, Hadley) (plaintiffs) owned and operated a flour mill in Gloucester. The crankshaft that operated the mill broke and halted all mill operations. To obtain a new shaft, Hadley was required to ship the old crankshaft to W. Joyce & Co., an engineering company in Greenwich, to be used as a model for a new shaft. Pickford & Co. (Pickford), a shipping company owned by Joseph Baxendale (defendant), told Hadley that if the crankshaft was delivered to Pickford before noon, it would be shipped and delivered to Greenwich the following day. The next day, Hadley delivered the crankshaft to Pickford before noon. However, Pickford negligently delayed shipping, and the crankshaft was not delivered to Greenwich until several days later. As a result, Hadley obtained the new crankshaft five days later than expected, and the mill remained closed in the meantime. Hadley sued Baxendale for damages, including lost profits from the delay. Baxendale argued that lost profits were too remote to be recoverable. The jury disagreed, awarding Hadley lost profits. Baxendale appealed, seeking a new trial and appellate-court clarification as to whether lost profits were recoverable.

Rule of Law

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Issue

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Holding and Reasoning (Alderson, J.)

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