According to Toulson LJ (at para 43), giving the judgment of the Court of Appeal, Transfield Shipping (and, similarly, the earlier decision of the House of Lords in South Australia Asset Management Corporation v York Montague Ltd [1997] AC 191) had modified the standard rule of Hadley v Baxendale in the following way:

Hadley v Baxendale remains a standard rule but it has been rationalised on the basis that it reflects the expectation to be imputed to the parties in the ordinary case, i.e. that a contract breaker should ordinarily be liable to the other party for damage resulting from his breach if, but only if, at the time of making the contract a reasonable person in his shoes would have had damage of that kind in mind as not unlikely to result from a breach. However, South Australia and Transfield Shipping are authority that there may be cases where the court, on examining the contract and the commercial background, decides that the standard approach would not reflect the expectation or intention reasonably to be imputed to the parties.