7 Elements to a Contract, in Business Law

In this task I will be producing a brief report about the remedies that are available for breach of contract. The report will include-

Liquidated and unliquidated damages- Compensation damages.

Judge, unliquidated damages. Liquidated damages.

Liquidated damages- Generally, contracts that involve the exchange of money or the promise of performance have liquidated damages. The purpose of this stipulation is to establish a predetermined sum that must be paid if a party fails to perform as promised.

Unliquidated damages- This means Sums of money not established in advance by the contracting parties as a compensation for a breach of contract, but determined by a court and judge after a breach occurs.

Hadley vs. Baxendale- A shaft in Hadley’s mill broke rendering the mill inoperable. Hadley hired Baxendale to transport the broken mill shaft to an engineer in Greenwich so that he could make a duplicate. Hadley told Baxendale that the shaft must be sent immediately and Baxendale promised to deliver it the next day. Baxendale did not know that the mill would be inoperable until the new shaft arrived.

Baxendale was negligent and did not transport the shaft as promised, causing the mill to remain shut down for an additional five days. Hadley had paid 2 pounds four shillings to ship the shaft and sued for 300 pounds in damages due to lost profits and wages. The jury awarded Hadley 25 pounds beyond the amount already paid to the court and Baxendale appealed.

Rule- Loss of profits could not fairly or reasonably have been contemplated by both parties in case of a breach of this contract without Hadley having communicated the special circumstances to Baxendale. The court ruled that the jury should not have taken the loss of profits into consideration

Remoteness and mitigation