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BCL Law Notes Commercial Remedies BCL Notes

The Heron Ii Notes

Updated The Heron Ii Notes

Commercial Remedies BCL Notes

Commercial Remedies BCL

Approximately 497 pages

These are detailed case summaries (excerpts from cases - not paraphrased) I made during the Oxford BCL for the Commercial Remedies course....

The following is a more accessible plain text extract of the PDF sample above, taken from our Commercial Remedies BCL Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:

The Heron II

Facts

By charterparty of October 15, 1960, the respondents chartered the appellant's vessel, Heron II , to proceed to Constanza, there to load a cargo of 3,000 tons of sugar; and to carry it to Basrah, or, in the charterer's option, to Jeddah. The vessel left Constanza on November 1, 1960. The option was not exercised and the vessel arrived at Basrah on December 2, 1960. The umpire has found that "a reasonably accurate prediction of the length of the voyage was twenty days." But the vessel had in breach of contract made deviations which caused a delay of nine days.

It was the intention of the respondents to sell the sugar "promptly after arrival at Basrah and after inspection by merchants." The appellant did not know this, but he was aware of the fact that there was a market for sugar at Basrah. The sugar was in fact sold at Basrah in lots between December 12 and 22, 1960, but shortly before that time the market price had fallen, partly by reason of the arrival of another cargo of sugar. It was found by the umpire that if there had not been this delay of nine days the sugar would have fetched 32 10s. 0d. per ton. The actual price realised was only 31 2s. 9d. per ton. The respondents claim that they are entitled to recover the difference as damage for breach of contract. The appellant admits that he is liable to pay interest for nine days on the value of the sugar and certain minor expenses but denies that fall in market value can be taken into account in assessing damages in this case.

Holding

Lord Reid

Remoteness in Contract โ€“ โ€œnot unlikelyโ€ test

So the question for decision is whether a plaintiff can recover as damages for breach of contract a loss of a kind which the defendant, when he made the contract, ought to have realised was not unlikely to result from a breach of contract causing delay in delivery. I use the words "not unlikely" as denoting a degree of probability considerably less than an even chance but nevertheless not very unusual and easily foreseeable.

Interpretation of Hadley

Alderson B. clearly did not and could not mean that it was not reasonably foreseeable that delay might stop the resumption of work in the mill. He merely said that in the great multitude - which I take to mean the great majority - of cases this would not happen. He was not distinguishing between results which were foreseeable or unforeseeable, but between results which were likely because they would happen in the great majority of cases, and results which were unlikely because they would only happen in a small minority of cases.

He clearly meant that a result which will happen in the great majority of cases should fairly and reasonably be regarded as having been in the contemplation of the parties, but that a result which, though foreseeable as a substantial possibility, would only happen in a small minority of cases should not be regarded as having been in their contemplation.

Directness is not the test

In cases like Hadley v. Baxendale or the present case it is not enough that in fact the plaintiff's loss was directly caused by the defendant's breach of contract. It clearly was so caused in both. The crucial question is whether, on the information available to the defendant when the contract was made, he should, or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed...

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