Victoria Laundry v. Newman Ind.
2 K.B. 528 (CA 1949)
Victoria ordered a new dye
machine from Newman.
The contract included a
provision for installation and Newman agreed in the contract to have the
dye machine installed and operational by a certain date.
It took several months longer
to set up than the contract stipulated. Victoria sued.
Victoria argued that they
lost a lot of business from not having the dye machine operation on time,
and Newman was liable for those lost profits.
Newman argued that although
it was pretty obvious that Victoria would lose some business from not
having the dye machine, the exact amount of profits they would have lost
was not reasonably foreseeable,
and so, based on Hadley v. Baxendale (9 Ex. 341 (Ex.Ct.
1854)), they were not liable.
The Canadian Court found for
The Canadian Court awarded
Victoria damages for business profits.
But not for any unusual
profits (such as special jobs) that
might have been realized if the dye machine had been installed on time.
The Court found that what
was reasonably foreseeable at the
time depended on the knowledge of the various parties. The Court agreed
that Newman could not be expected to know the specific details of
However, the Court found
that in order to be liable for damages from a breach of contract, it is
not necessary that they know exactly what the damages of the breach would
be. The party is liable as long as a reasonable man would have concluded
that some losses were likely to occur.