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HADLEY V BAXENDALE
Hadley v Baxendale, Rule in Definition:
A rule of contract law which limits the defendant of a breach of
contract case to damageswhich can reasonably be anticipated to flow
from the breach.
In Hadley, there had been a delay in
acarriage(transportation)contract. The mill owner sued
for damages but the defendant was held not liable for profits
lost due to his failure to deliver a
mill shaft promptly. The court found that he could not be taken
to have known of the special
circumstancethat until the shaft was delivered, the mill could
not operate:
"Where two parties have made acontractwhich one of them has
broken, the damages which the
other party ought to receive in respect of suchbreach of
contractshould be such as may fairly
and reasonably be considered either arising naturally, i.e.,
according to the usual course ofthings, from such breach of
contract itself, or such as may reasonably be supposed to have
been
in the contemplation of both parties, at the time they made the
contract, as the probable result
of the breach of it.
"Now, if the special circumstancesunder which the contract was
actually made were
communicated by the plaintiffs to the defendants, and thus known
to both parties, the damages
resulting from the breach of such a contract, which they would
reasonably contemplate, would
be the amount of injury which would ordinarily follow from a
breach of contract under these
special circumstances so known and communicated.
"But, on the other hand, if those special circumstanceswere
wholly unknown to the party
breaking the contract, he, at the most, could only be supposed
to have had in his contemplation
the amount of injury which would arise generally, and in the
great multitude of cases not
affected by any special circumstances, from such a breach of
contract."
SUPERVENING IMPOSSIBILITY
Supervening impossibility is the impossibility arising after the
formation of a contract. However,this arises at the time when the
promisor's performance is due. Such impossibility usually
arises
due to facts that the promisor had no reason to anticipate and
did not contribute to the
occurrence of. If contracting parties were allowed to plead
supervening impossibility, it would
make the whole basis of contract insecure. Therefore, the risk
involved in supervening
impossibility could be deliberately excluded by stipulations in
the contract.
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DOCTRINE OF CAVEAT EMPTOR :-
It means that buyer should be very careful in a contract of
sale. While purchasing the goods the
buyer should check the goods carefully. If a buyer purchases the
goods and after it he comes to
know that these are defective. In this case seller will not be
responsible for this defect. The object
of this principle is to make the buyer more careful in
purchasing. It is his duty that he should
check the quality and fitness of the commodity which he
needs.
This law is framed to save the buyer from the expected loss in
future.
Example :- Mr. Krishna went to market and purchased a bike to
take a part in Bike race
competition. But he did not tell the seller that for which
purpose he is buying. When he reached
home, he came to know that this bike is not suitable for bike
race competition. Due to the
principal of Caveat Emptor Mr. Krishna can neither reject the
bike nor can claim for
compensation.
1. Practical Purpose Known To Seller :-
If the buyer informs and explains to the seller that the
required goods are needed for such
particular purpose. He relies on the seller's skill and his
judgement. In this situation seller is
responsible to supply the goods, fit for that particular
purpose.
2. Purchase By Description :-
If a buyer enters into sale contract by description with the
seller, it is an implied condition that
good will be supplied according the same quality.
Example :- Mr. Ghumun sells the butter to Mr. Rakha saying that
it is a pure butter and there is
no any mixing in it. When Mr. Rakha uses it, he comes to know
that there is adulteration in it.
Now Mr. Ghumun will be held responsible.
In this case two conditions are compulsory, "Purchase by
description and seller deal in good as
of that description."
3. Misrepresentation By Seller :-
The seller will be liable for compensation if he sells goods to
buyer by making misrepresentation.
4. Concealment By Seller :-
If a seller does not disclose the defects of the goods to the
buyer which could not be discovered
after a proper examination this principal does not apply.
5. Bulk According to Sample :-
The principal of Caveat Emptor does not apply the bulk of the
goods does not correspond with
the sample.
6. Merchantable Quality :-
Where goods are purchased by description from the seller who
deals such goods are not of
merchantable quality the principal does not apply.
7. Sample and Description :-
The buyer is entitled to reject the goods if the goods are
bought by sample as well as description
and the bulk does not correspond with both.
