(Canada) The parties contracted for the claimant to cut timber and the defendant to haul it. The plaintiff said that the defendant breached the contract by supplying insufficient trucks to haul the timber away, and claimed as damages his wasted expenditure.
Held: Only nominal damages could be awarded. A plaintiff was not entitled to damages on a basis which would leave him better off than he would have been in had the contract been performed. The plaintiff would have made a loss on the contract as a whole. Noting that the issue had not been raised in either Cullinane Anglia Television said: ‘The law of contract compensates a plaintiff for damages resulting from the defendant’s breach; it does not compensate a plaintiff for damages resulting from his making a bad bargain. Where it can be seen that the plaintiff would have incurred a loss on the contract as a whole, the expenses he has incurred are losses flowing from entering into the contract, not losses flowing from the Defendant’s breach. In these circumstances, the true consequence of the defendant’s breach is that the plaintiff is released from his obligation to complete the contract- or, in other words, he is saved from incurring further losses.
If the law of contract were to move from compensating for the consequences of breach to compensating for the consequences of entering into contracts, the law would run contrary to the normal expectations of the world of commerce. The burden of risk would be shifted from the plaintiff to the defendant. The defendant would become the insurer of the plaintiff’s enterprise.’
Berger J
[1978] 4 WWR 105
Canada
Citing:
Cited – L Albert and Son v Armstrong Rubber Co 1949
(United States Court of Appeals, Second Circuit) A purchaser of machines designed to recondition rubber sought damages for breach of contract, namely, the cost of the foundation on which the machines were placed. However, the purchaser did not prove . .
Cited – Anglia Television v Oliver Reed CA 1971
The television company had agreed with the actor defendant for him to appear in a production. He breached the contract. The company sought both loss of profits and for the expense incurred. The issue before the Court of Appeal was whether such . .
Cited – Cullinane v British ‘Rema’ Manufacturing Co Ltd CA 1954
The court considered the possibility of a claim in breach of contract for damages for both capital loss and loss of profit.
Lord Evershed MR said: ‘It seems to me, as a matter of principle, that the full claim of damages in the form in which . .
Cited by:
Cited – Omak Maritime Ltd v Mamola Challenger Shipping Co Ltd ComC 4-Aug-2010
Lost Expenses as Damages for Contract Breach
The court was asked as to the basis in law of the principle allowing a contracting party to claim, as damages for breach, expenditure which has been wasted as a result of a breach. The charterer had been in breach of the contract but the owner had . .
Followed – C and P Haulage v Middleton CA 27-Jun-1983
The parties entered into an agreement allowing the defendant to occupy the plaintiff’s land. They had disputed whether it was a licence or a lease. The occupier had expended sums on improving the premises, but had then been summarily ejected. He now . .
Lists of cited by and citing cases may be incomplete.
Updated: 22 August 2021; Ref: scu.421537
