Victoria Laundry (Windsor) Ltd v Newman Industries Ltd

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Citation: Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), p. 662 [27.15]

Contents

Background facts

  • A contract between the parties required the delivery of a boiler.
  • The Defendant’s [Newman] delivery was five months late.
  • As a result, the Plaintiff’s [Victoria] business was hindered and he then lost a lucrative cleaning contract.
  • The Plaintiff sued to recover damages both for the ordinary profit it lost because the boiler wasn’t delivered on time, as well as the other profits it would have made through the lucrative contract it missed out on as a result of the non-delivery.

Legal issues

Judgment

  • The case distinguished between ordinary and extraordinary losses (mentioned in the ruling of ‘’Hadley v Blaxendale’’ [1])
  • Ordinary losses are those that arise naturally or according to the usual course of things. They are not considered remote.
    • They are losses which a party should have reasonably foreseen. Thus, they are based on the presumed knowledge of the defendant.
  • Extraordinary losses are losses which do not arise naturally and thus are not reasonably foreseeable. They are considered remote and a defendant will not be liable for them.
    • However, a defendant will be liable for extraordinary losses if it had particular or specific knowledge that these losses are likely to occur in the case of a breach. In the case of actual knowledge by the defendant of the special circumstances, he will be liable for extraordinary losses.
    • Thus, they are based on the actual knowledge of the defendant.
  • In this case, the loss the Plaintiff suffered from being unable to enter the lucrative contract was not a natural loss. Thus, it required the Defendant to have actual knowledge of it before it could be held laible.
  • The Defendant had no actual knowledge of the possibility of this contract, and could not have reasonably foreseen that its breach would cause this loss. It is therefore not liable.

References

  1. (1854) 9 Excg 341, 355
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