Victoria Laundry v Newman Industries [1949] 2 KB 528

• Plaintiff contracted to buy a boiler off Defendant and Defendant delayed in delivering the boiler by 5 months. As a result Plaintiff lost out on contracts for which it sued Defendant. Defendant knew that Plaintiff ran a laundry and that Plaintiff had asked for the boiler to be delivered ASAP.

• Thus the CA held that Defendant was liable for profits that would ordinarily have been lost in the period and the loss was not too remote.

• However Defendant was NOT liable for the loss of a specific contract that would have been very profitable on the grounds that it was not foreseeable to Plaintiff.

Asquith LJ

• Certain propositions of law are applicable to this case:

  1. That the law aims to put P in a position akin to that which he would have been in had there been no breach;

  2. That the harm caused by D has to be “reasonably foreseeable” i.e. not too remote, which is determined by the knowledge of the parties at the time of the breach;

  3. D is imputed to have common knowledge of the ordinary course of things (e.g. that a laundry company needs a boiler), whether they in fact know this or not;

  4. So long as the loss caused by the breach can be reasonably foreseen as a “serious possibility” or a “real danger” or “on the cards” then D can be liable: actual knowledge is not needed.

• In this case D did, or ought to have known that the laundry needed the boilers for its business and it needed them ASAP. Also the risk of causing loss was reasonably foreseeable.

• Thus D is liable. 

RELATED CASES

• Brown v KMR Services LTD