Stuart v Condor Commercial Insulation

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Citation: Stuart Pty Limited v Condor Commercial Insulation Pty Limited [2006] NSWCA 334

This information can be found in the Casebook: Paterson, Robertson & Duke, Contract: Cases and Materials (Lawbook Co, 11th ed, 2009), pp. 672-80 [27.95-27.115] or here


Background facts

  • The Plaintiff [Stuart, appellant] was contracted to provide insulation services under a government program called SANIP.
  • Some of their services were outsourced to the Defendant [Condor].
  • The Defendant did a poor job and a fire broke out. As a result, The Plaintiff lost its contract with SANIP, losing a lot of money.
  • The Plaintiff seeks to recover damages from the Defendant for the loss of the contract with SANIP.


  • The plaintiff based its claim under the second limb in Hadley v Baxendale. It argued that, in the special circumstances known to the defendants, it might reasonably be supposed to have been in their contemplation that the plaintiff might enter into such a contract and that if it did so, a breach of contract by the defendant was liable, and indeed likely, to put the plaintiff in breach of any such contract of resale and would occasion loss or damage.

Legal issues


Beazley J:

  • "A defaulting party was liable under the second limb by way of damages for the losses which, as at the date of the contract, the defaulting party was on notice might be occasioned by a breach so that it might fairly be held that when entering into the contract the non-defaulting party had accepted such risk."[1]
  • question arises to the special circumstances

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  1. [2006] NSWCA 334, at [49]
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