Question

The rule laid down in Hadley v. Baxendale (1854) was incorporated under which provision of Indian Contract Act?

• A. Section 70
• B. Section 74
• C. Section 73
• D. Section 75

Hint:

Hadley v. Baxendale = Rule on Remoteness of Damage. This rule is directly found in Section 73 of the Indian Contract Act.

Answer 1

The Correct Option is C

Step 1: Understand the rule in Hadley v.
Baxendale.
This is a foundational English case that established the rule for determining the remoteness of damages in a breach of contract case.
It laid down a two-part test: a party can claim damages that either (1) arise naturally and directly from the breach, or (2) were reasonably in the contemplation of both parties at the time they made the contract as the probable result of the breach.

Step 2: Identify the corresponding provision in the Indian Contract Act, 1872.
This well-established common law rule was codified in Section 73 of the Indian Contract Act.
The first paragraph of Section 73 directly incorporates the rule from \textit{Hadley v.
Baxendale}, stating that the party who suffers from a breach is entitled to receive compensation for any loss or damage which "naturally arose in the usual course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.
"