Contract law seminar 8
1) Hadley V Baxendale (1854) - Only losses arising naturally or that would have been in the
contemplation of the parties at the time of contracting. On this occasion the courts decided
that the complete shut down of the mill while a prop shaft was repaired was not one, which
would fall under either of those points.
British Westinghouse Electric & Manufacturing Co v Underground Electric Railways Co [1912]
- Once a breach occurs the injured party is required to take steps to mitigate their loss.
Parsons v Uttley Ingham [1978] QB 791 Court of Appeal - The Claimant pig farmers
purchased a food storage hopper from the defendant for the storage of pig feed. The hopper
was installed negligently and lack of ventilation caused the pig feed to go mouldy. As a
result, many of the pigs contracted e-coli and died. The Claimant claimed over £36k in
respect of the loss of profit, vet bills and other costs relating to the death of the pigs. The
Defendant contended this damage was too remote as it was not in the contemplation of the
parties that the poor ventilation would cause e-coli and death of the pigs.Held:The death of
the pigs was a natural result of feeding the pigs mouldy food within the first limb of Hadley v
Baxendale [1854] EWHC Exch J70. There was no need to consider whether the death by e-
coli was in the reasonable contemplation of the parties under the second limb.
2) Jasminda runs a successful but small textile factory. She contracted with Graham
for him to supply some new sewing machines. Graham failed to deliver the machines
on the agreed date and as a direct consequence Jasminda has lost out on a very
lucrative contract to supply the costumes for a ‘Bollywood’ film being made in the
locality. She has also lost out due to the general failure to expand the company’s
production capabilities.
Advise Jasminda on the level of damages she may be able to claim. If Graham could
demonstrate that Jasminda could hire some additional sewing machines from another firm
what impact, if any, would that have on the level of damages Jasminda could claim.
3) Unfairness to bind people where clearly a relationship has broken down, specific
performance is also only awarded against the other party so here where the other party was
a child it couldn’t be used.
Injunctions may be against public interest.
4) It would be easy to assume that we are considering a moral judgment here. That is not so. In
essence case law has developed which indicates what circumstances will lead to unjust
enrichment, it is not simply a moral judgment.
1) Hadley V Baxendale (1854) - Only losses arising naturally or that would have been in the
contemplation of the parties at the time of contracting. On this occasion the courts decided
that the complete shut down of the mill while a prop shaft was repaired was not one, which
would fall under either of those points.
British Westinghouse Electric & Manufacturing Co v Underground Electric Railways Co [1912]
- Once a breach occurs the injured party is required to take steps to mitigate their loss.
Parsons v Uttley Ingham [1978] QB 791 Court of Appeal - The Claimant pig farmers
purchased a food storage hopper from the defendant for the storage of pig feed. The hopper
was installed negligently and lack of ventilation caused the pig feed to go mouldy. As a
result, many of the pigs contracted e-coli and died. The Claimant claimed over £36k in
respect of the loss of profit, vet bills and other costs relating to the death of the pigs. The
Defendant contended this damage was too remote as it was not in the contemplation of the
parties that the poor ventilation would cause e-coli and death of the pigs.Held:The death of
the pigs was a natural result of feeding the pigs mouldy food within the first limb of Hadley v
Baxendale [1854] EWHC Exch J70. There was no need to consider whether the death by e-
coli was in the reasonable contemplation of the parties under the second limb.
2) Jasminda runs a successful but small textile factory. She contracted with Graham
for him to supply some new sewing machines. Graham failed to deliver the machines
on the agreed date and as a direct consequence Jasminda has lost out on a very
lucrative contract to supply the costumes for a ‘Bollywood’ film being made in the
locality. She has also lost out due to the general failure to expand the company’s
production capabilities.
Advise Jasminda on the level of damages she may be able to claim. If Graham could
demonstrate that Jasminda could hire some additional sewing machines from another firm
what impact, if any, would that have on the level of damages Jasminda could claim.
3) Unfairness to bind people where clearly a relationship has broken down, specific
performance is also only awarded against the other party so here where the other party was
a child it couldn’t be used.
Injunctions may be against public interest.
4) It would be easy to assume that we are considering a moral judgment here. That is not so. In
essence case law has developed which indicates what circumstances will lead to unjust
enrichment, it is not simply a moral judgment.
