ContractsProf Blog

Editor: Jeremy Telman
Oklahoma City University
School of Law

Tuesday, April 9, 2024

New (to me) Contracts Podcast!

Mitu GulatiThanks to Mitu Gulati (right) for introducing me to Unpacking Contract Law, a UK-based, contracts-law podcast sponsored by Newcastle Law School.  I dipped in to episode 22, which is about one of our favorite old chestnuts of contract law and lore, Hadley v. Baxandale.  Three scholars, Timothy Dodsworth (Newcastle), Maggie Hemsworth (Exeter), and Séverine Saintier (Cardiff) dig right in.  American listeners be warned: over on the other side of the pond, they talk about "Hadley and Baxandale" instead of Hadley v. Baxandale.  I've heard they also drive on the wrong side of the street.

It is lovely to hear a UK-case discussed by actual UK legal scholars, who are able to give the case a concreteness that we Yanks tend to overlook.  Listen to the episode and you can learn, e.g., what caused the delay in delivery that sparked the lawsuit.  There is much interesting conversation about the role of comparative law in the opinion and a discussion of why our friends (they call us "American cousins"!) over in the UK have given up on juries when it comes to determining damages.  

Humpty_Dumpty_TennielProfessor Hemsworth discusses a standard divide in the holding of Hadley into "two limbs," one relating to imputed foresight/knowledge, which was the focus of the case, and one to actual foresight; that is, special knowledge of facts.   Professor Hemsworth notes that the court found no evidence in Hadley that the defendant was actually aware that the mill was shut down, and so the second limb was not an option in that case. 

Professor Hemsworth then discusses some scholarship from "one of our favorite American cousins" in which the notions of contractual exclusions and Hadley's limb 2.  The America cousin is unnamed, but I suspect that all roads lead to Mitu, as we know that he and his co-authors have been doing work on precisely this issue. In such cases, the thing excluded is variously described as "consequential," or "special" or "unusual" damages, but the language is confusing and seems unrelated to anything that might fall within Hadley's limb 1.  And yet, by the Hunpty-Dumpty logic of case law, in which words mean whatever you want them to mean, courts accept the conflation.

Australian courts recognize, Professor Hemsworth notes, that "the poms have got it wrong."  But I don't think it's just the poms.  Mitu's work suggests that American transactions similarly conflate exclusions of damages with consequential losses in ways that seem doctrinally confused.  I don't think Mitu's work has yet turned up evidence of confusion in American courts, but only because it seems that these exclusions do not lead to litigation.

We await the arrival of a bold court that can achieve the reverse solution to the Humpty Dumpty conundrum.  Rather than putting the pieces together again, they need to be disaggregated.

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