The subsequent contract for the installation of the rebuilt engine was the direct result of the defendant’s negligence. Here the general principles of contractual damage as set out in Hadley v. Boxendale (1854), 9 Exch. 341, at p. 354, apply: Now we think the proper rule in such a case as the present is this: When two parties have made a contract which one of them has broken, the damage which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and thus known to both parties, the damages resulting form the breach of contract, which they would reasonably contemplate, would be the amount of injury which would ordinarily follow from a breach of contract under these special circumstances so known and communicated.
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