Hadley v. Baxendale
(1854) 9 Ex 341 · Court of Exchequer
Damages are limited to loss arising naturally or in the parties' contemplation.
Unit IV · Law of Contract – I
Damages, penalty and duty to mitigate
Study aid only. Confirm statute numbers with the current bare Act and the official OU LL.B. (3-YDC) 2024–25 syllabus PDF.
Statute sections
| Act / instrument | Section | Name |
|---|---|---|
| Indian Contract Act, 1872 | 73 | Compensation for loss or damage caused by breach |
| Indian Contract Act, 1872 | 74 | Compensation for breach where penalty is stipulated |
| Indian Contract Act, 1872 | 75 | Party rightfully rescinding entitled to compensation |
Landmark cases
Fateh Chand v. Balkishan Dass
AIR 1963 SC 1405 · Supreme Court of India
Section 74 allows reasonable compensation not exceeding the named amount, even without proof of actual loss in every case.