In Hadley V

question 50

Multiple Choice

In Hadley v.Baxendale,when Hadley sued because Baxendale took unnecessary time to get a crankshaft repaired,causing Hadley's mill to close for an extended time,the court found

• A) Baxendale owed Hadley compensatory damages because the mill was shut down for an extended time directly as a result of Baxendale's delayed delivery.
• B) Baxendale owed Hadley consequential damages because the mill was shut down for an extended time as a result of Baxendale's delayed delivery and the shutdown was a foreseeable indirect result of Baxendale's delay.
• C) Baxendale did not owe Hadley consequential damages because the extended closing time was not foreseeable despite Baxendale's delay in delivery.
• D) Baxendale did not owe Hadley either compensatory or consequential damages but did owe punitive damages due to the unreasonable delay in delivery.

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Definitions:

Producer Surplus

The difference between what producers are willing to sell a good for and the actual price they receive, representing profit or gains from trade.

Tax

A mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures.

Mutually-Agreeable Trade

A transaction or trade that both parties involved consent to and believe will benefit them.

Opportunity Cost

The expense incurred by not selecting the second-best option when deciding among various choices.