Question

Remoteness of damages was laid down as a principle in

• A. Rylands v. Fletcher
• B. Hadley v. Baxendale
• C. Donoghue v. Stevenson
• D. Ashby v. White

Hint:

In the Law of Torts, remoteness of damages is also governed by tests like "direct consequences" (Re Polemis, 1921) and "reasonable foreseeability" (Wagon Mound No. 1, 1961), but the foundational root of remoteness theory is Hadley v. Baxendale.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question asks to identify the landmark case that laid down the fundamental legal principles governing the "remoteness of damages".

Step 2: Key Principles and Statutory Provisions:
The doctrine of remoteness of damages determines which consequences of a wrongful act are legally compensable and which are too remote to be recovered.

Step 3: Detailed Explanation and Analysis:

• The foundational rules for remoteness of damages were laid down in the classic English contract case Hadley v. Baxendale (1854).
These rules have been adopted and applied heavily in both contract and tort law.

• In this case, the plaintiff's mill was stopped because of a broken crankshaft.
The defendant, a common carrier, delayed the delivery of the shaft to the repairers, causing the mill to remain closed for longer, which resulted in lost profits.
The plaintiff sued for those lost profits.

• The court held that the defendant was not liable for the lost profits because they were too remote.
It established two rules for recovering damages:
1. General Damages: Damages that arise naturally in the usual course of things from the breach.
2. Special Damages: Damages that 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.

• The carrier did not know that the mill was stopped for want of the shaft, so the loss of profits was not in contemplation.

Step 4: Final Answer:
The principle of remoteness of damages was established in Hadley v. Baxendale, making Option B the correct choice.