Case brief summary
A person who breaks a contract only has to pay for losses that naturally follow from the breach or that both sides could reasonably have expected to happen if something went wrong.
Facts
A mill's steam engine broke, and the owners hired a carrier to ship the broken part to engineers so a replacement could be made, but the carrier delayed delivery for several extra days.
Procedural history
A jury awarded the mill owners money for lost profits caused by the delay, and the carrier asked for a new trial, arguing the jury was not told the correct rule for deciding damages.
Issue
Should the carrier have to pay for the mill owners lost profits when the carrier was not told that a delay would stop the mill from running and earning money?
Holding
The court ordered a new trial because the jury should have been instructed not to award lost profits since the carrier did not know that delay would cause this specific loss.
Reasoning
When a contract is broken, damages should only cover losses that naturally result or that both sides expected. Here, the carrier only knew the mill stopped, not that delay would cause lost profits.
Opinions
Majority (Baron Alderson): Set out the rule that damages must either follow naturally from a breach or be losses both parties could foresee from known special circumstances, and ordered a new trial.