ICAS TC Business Law Module 4 Flashcards
Tsakiroglou & Co. Ltd v. Noblee Thorl G.m.b.H 1962
Facts: The case concerned the charter of a ship to transport a cargo of groundnuts
from Port Sudan to Hamburg. The parties envisaged a relatively short shipping route
through the Suez Canal, but the canal was closed after the contract was concluded.
Held: The contract was not frustrated as the ship could go round via the Cape of Good
Hope (there being no implied term that carriage was to be via Suez). The greater cost
of the freight, borne by the seller, was not so great as to render this a fundamentally
different adventure.
Hochster v De La Tour 1853
Facts: A contract was entered into between the two parties whereby the claimant
(Hochster) was to accompany the defendant on a European tour which was to start
on 1 June. However, on 11 May the defender wrote to Hochster saying that his
services were no longer needed. On 22 May Hochster started proceedings against
the defendant for anticipatory breach of contract. The defendant objected on the
basis that no action could be raised until 1 June because no breach could take place
until that date.
Held: Hochster was entitled to sue as soon as the anticipatory breach took place on
11 May; he did not need to wait until 1 June.
White & Carter(Councils) Ltd v McGregor 1962
Facts: The claimants supplied litter bins to local councils, and were paid by traders
who hired advertising space on the bins. The defendant contracted with them for
advertising of his business but later wrote to cancel the contract. The claimants
decided to advertise as originally agreed even though, when they received the letter
of cancellation, they had not yet taken any steps to perform the contract. They then
performed the contract and sued for payment.
Held: The contract continued in force and the claimants were entitled to recover the
agreed price for their advertising services. This decision was based on the legal
principle that repudiation does not, of itself, bring the contract to an end but, rather,
gives the innocent party the choice of affirming the contract or rejecting it.
Anglia TV v Reed 1971
Facts: At the last minute, an actor broke a contract with the TV company to make a
film. By this time the TV company had incurred preparatory costs including hiring
other actors, researching locations and marketing costs.
Held: The TV company were able to recover these preparatory expenses.
Sykes v Midland Bank Executor and Trustee Co Ltd 1971
Facts: Solicitors acting in breach failed to advise their client of a disadvantageous
term in a lease.
Held: The client would have entered into the contract even if he had been advised
of the term. Therefore, the breach did not cause the loss and no compensation was
payable, other than nominal damages.
Payzu Ltd v Saunders 1919
Facts: The contract between the parties was for goods which were to be supplied
and paid for by instalments. However, Payzu failed to pay the first instalment with
the result that Saunders refused to make further deliveries unless he received cash
in advance of delivery. Payzu refused to accept delivery on those terms. No further
goods were delivered. The price of the goods rose and Payzu sued for breach of
contract by Saunders, claiming the difference between the contract price and the
market price.
Held: Although Saunders was not entitled to repudiate the original contract, Payzu
should have mitigated its loss by accepting Saunders’ offer of supplying the goods
for cash in advance of delivery. Since it had not, damages were limited to the amount
of its assumed loss had it paid in advance, that is, the interest over the period of prepayment.
Hadley v Baxendale 1854
Facts: A flour mill was at a standstill because of a broken crankshaft. The carrier
who had been contracted to deliver a replacement crankshaft was delayed and the
mill was out of action for longer than anticipated.
Held: The mill owner was not entitled to damages because it was not reasonably
foreseeable to the carrier that the mill would be out of action for that period, as the
carrier expected that the mill would run on the spare crankshaft which all mills had.
Since he was not told that this mill did not have a spare crankshaft, he was not in a
position to reasonably foresee that his breach would give rise to lost profit. Therefore,
the loss was too remote from the breach for the carrier to be held liable.
Victoria Laundry (Windsor) v Newman Industries 1949
Facts: Newman Industries were five months late in delivering a boiler to Victoria
Laundry and, as a result, Victoria Laundry lost a lucrative cleaning contract from the
Government. Victoria Laundry sued for the ordinary profits that they had foregone
through not having the boiler on time. The question was whether they could also claim
the exceptional profits they would have made, had they been able to take advantage
of the lucrative Government contract.
Held: Newman Industries were only liable to compensate Victoria Laundry for their
ordinary loss of profits, not for the exceptional loss of profits arising out of the lost
Government contracts. The exceptional profits would only have been recoverable if
Newman Industries had had knowledge, at the time they made the contract with
Victoria Laundry, of the lucrative Government contracts which Victoria Laundry had
entered into.
Balfour Beatty Construction (Scotland) Ltd v Scottish Power plc 1994
Facts: Balfour Beatty (BB) as part of building a road had to build an aqueduct so that
a canal could be channelled over the new road. This job needed a continuous pour
of concrete which required a constant electricity supply. BB contracted with Scottish
Power (SP) to supply this electricity. At a critical point the electricity supply failed. For
technical reasons it was necessary to demolish the aqueduct constructed to that point
and to start again. BB sued SP for breach of contract. The court at first instance
dismissed BB’s claim. The court accepted that there had been a breach of contract
but concluded that the loss suffered by BB was too remote because Scottish Power
had not been told of the technical nature of the operation and the consequences of a
power supply failure.
BB appealed to the Inner House of the Court of Session. BB’s claim succeeded on
the basis that SP was deemed to have sufficient technical knowledge allowing it to
reasonably foresee that damage would arise if the power supply failed. SP appealed
to the House of Lords.
Held: The House of Lords agreed with the first ruling, that is, the demolition and
reconstruction of the aqueduct was not within the reasonable contemplation of
Scottish Power.
