The law of contracts and the law of torts Essay

The law of contracts and the law of torts - Essay Example Hadley v. Baxendale involved millers whose crankshaft had broken, and they called upon the defendants to deliver a crankshaft to repair. The defendants delayed sending the crankshaft to plaintiffs for seven days when it was only supposed to take two. The plaintiffs milling operation ceased during the period this seven day period. Therefore, the plaintiffs sued for profits lost during the five extra days that the crankshaft was not delivered. The court ruled that the plaintiffs could not recover such loss, as it could not fairly and reasonably be considered to arise naturally from the breach. Hadley established the basic rule for how to determine the scope of consequential damages arising from a breach of contract, and this rule is that parties should only be liable for all losses that ought to have been contemplated by the contracting parties, and those that arise naturally, in the ordinary course, from the breach. Hadley's basic rule regarding damages was modified to the composite t est of â€Å"reasonably foreseeable as liable to result† in Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (1949). Victoria Laundry regarded a laundry which ordered a boiler from Newman Industries. Newman Industries delivered the boiler five months late. During this period of time, Victoria Laundry had to forego a lucrative contract with the ministry of supply, due to the Victoria Laundry's limited laundry cleaning capacity, which was a result of not having the boiler.