January 20, 2010
Hadley v. Baxandale in the News
National Football Post is not the place one looks in the hopes of finding a reference to Hadley v. Baxandale, but the case figures prominently in this report on the Washington Redskins' new head coach, Mike Shanahan. The article assumes a level of knowledge regarding the NFL to which I can only aspire, but I glean from it, with the help of Wikipedia, that Mike Shanahan was formerly the head coach of the Denver Broncos. He was sacked after the 2008 season and sat out this past season but was still paid under his old contract. Now, he has been hired by the Washington Redskins, thus mitigating the damages due to him under his contract with the Broncos.
So, what does all this have to do with Hadley? Fair question. I do not know. The National Football Post cites to Hadley and accurately recites its basic facts, but the issue here is mitigation of damages, not foreseeability of consequential damages. Hadley would seem to have no application at all.
Apparently, NFL coaching contracts clearly spell out a duty to mitigate damages. The result is that Coach Shanahan will only make slightly more than he would have made under his Denver contract. However, if he had not actively sought work, Denver might have refused to pay, citing the duty to mitigate. But Hadley would only come into play if Shanahan were, for example, claiming entitlement to further recovery contingent upon information that the Broncos did not have at the time the contract was executed.
This is what happens when reporters call audibles too close to their publication deadline.
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Is Hadley v Baxendale regarded as a source of authority in the US? As a UK lawyer, this is a surprise to me. It is very important in the UK, as English judges seem to reach back to it (and subsequent English cases) whenever they are deciding a difficult point on indirect losses.
Posted by: Mark Anderson | Jan 21, 2010 4:26:18 AM
Not only is Hadley a source of authority, it is celebrated in American legal scholarship, for example here: http://lawprofessors.typepad.com/contractsprof_blog/2006/04/texas_bar_to_ho.html
We Yanks do tend to modernize things a bit though. I do not know how things work in England, of course, but here in the States, our love of Hadley is not so ardent that we still ship goods by horse and carriage.
Posted by: Jeremy Telman | Jan 21, 2010 6:51:55 AM
We tend not to use horses either, but we do still use Pickfords (the name under which the defendants traded) for removals - see http://en.wikipedia.org/wiki/Pickfords.
The case is still being cited and discussed in current English cases on contractual liability, eg see Transfield Shipping Inc v Mercator Shipping Inc  UKHL 48
Posted by: Mark Anderson | Jan 21, 2010 9:38:18 AM