Analysis of Contract Law Cases - Essay Example

The purpose of damages is to compensate the aggrieved party for its loss and put it in a financial position in which it would have been had the contract been performed. While awarding damages, the courts make sure that the damage or loss is not too remote. The defendants are held liable only for the loss that is attributable to their breach and for all the results of their actions. In Hadley v Baxendale, the defendant contracted to take the plaintiff’s mill shaft to London. It was to be used as a pattern to make a new one. The defendant was unable to deliver the shaft on time due to his fault. The plaintiff claimed damages for the loss of profits that would have been earned if the shaft was delivered on time. It was held that the loss was too remote as the plaintiff never indicated that there would be a loss of profit in case of a delay and so the defendant was not liable.

In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd, the defendant had to deliver a boiler to the plaintiff and the delivery was five months late. Not having enough laundry capacity, the plaintiff lost a lucrative contract. The plaintiff sued for lost profits. It was held that the defendant was only liable for ordinary losses and not for extraordinary ones as he did not know the extraordinary circumstances. The given facts indicate that Fred usually availed of George’s services. This means that George could only have anticipated the loss of usual opportunities for Fred. There is no indication that Fred specifically brought the extraordinary circumstances to their knowledge of George. He did not have the knowledge that Fred had arranged to visit his most important client. He could not have anticipated the loss that Fred had to suffer due to his breach of contract. Therefore, George would only be held responsible for the losses that can be reasonably anticipated and not for all the results of his breach of contract.

Fred suffered a loss because of the breach of contract by George as he did not prepare Fred’s car in time. Fred could not visit his client and lost the account. As a result, he lost his job and experienced a significant reduction in income and his family had to suffer serious trauma. Fred is looking to sue George for the loss that he has suffered. To be successful, Fred must show that his loss was a direct result of the breach of contract by George. The act of a defendant in a series of events might not lead to his being responsible for the loss. In the Monarch SS Co Case, due to the fault of the defendant, the ship ran into a typhoon and caused the plaintiff substantial loss. Being the ship-owner, the defendant was not held liable for the loss because the main reason for the further accident was the typhoon and such a catastrophe could have happened anywhere. In the given case, Fred’s loss is a result of George’s breach and he might be able to recover damages but not for his complete loss.

The party that suffers a loss, as a result of a breach of contract or a tort, must make efforts to reduce its loss. He must not sit on his hands and watch the losses accumulate intending to recover all of them from the defendant. In Bulkhaul Ltd v Rhodia Organique Fine Ltd,the defendant was able to establish that the plaintiff did not take reasonable steps to mitigate his loss. The subject matter of the case was some tanks and the plaintiff could have mitigated his loss by selling his tanks to third parties and there was an active market for them. The plaintiff was penalized for his negligence in the form that the damages awarded to him were reduced proportionately. In the given case, Fred had to meet his client but as his car was not ready, he abandoned the visit. This client was his biggest account and he clearly understood the subtlety of the situation. It was in his power to visit his client through any other means of transportation. He did not do so and intended to recover all the loss from George which is unreasonable. Fred is responsible for his contributory negligence which would reduce the number of damages that might be awarded to him.