Total Measure of Damages: Compensatory Damages and Consequential Damages (lost Profit)
The provenance of the legal theory underlying "consequential damages" is widely attributed to the 19th century English case of Hadley v. Baxendale in which a miller contracted for the purchase of a crankshaft for a steam engine at the mill. The party agreeing to produce the part which was critical to the mill's operation and/or output, agreed to deliver the part for inspection as to fit, by a certain date in order to avoid contractual and other business loss/liability and when the part wasn't delivered for inspection on time sued to recover not only what direct costs were incident to the breach alleged but also to recover what costs/losses were entailed with the production shutdown resultant from failure of timely delivery. Thus, Baxendale comes to stand for the proposition that "consequential damages" are recoverable where a contract is breached by a party that knows - or is imputed to know - that ordinary expectancy, reliance or restitution damages will not suffice to meet damages caused by the breach.
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Famous quotes containing the words damages, measure and/or total:
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—Marcus Tullius Cicero (106–43 B.C.)
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—Henri-Frédéric Amiel (1821–1881)
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—Louise Bourgeois (b. 1911)