A clause in a contract provided that: ‘We are not under any circumstances to be liable for any consequential loss or damage caused or arising by reason of late supply or any fault, failure or defect in any material or goods supplied by us or by reason of the same not being of the quality or specification ordered or by any other matter whatsoever.’
Held: Megaw LJ said: ‘To my mind the decision of this Court in Millar’s Machinery v David Way is a decision, the ratio decidendi of which is directly applicable to the present case and which is binding on this Court.
In these circumstances the references which Mr Neill gave us to passages in textbooks, and in other cases not directly concerned with the issue with which we are concerned, are not really of assistance. It is clear that the word ‘consequential’ can be used in different and varying senses. It may be difficult to be sure in come contexts precisely what it does mean. But I think the meaning given to the word in Millar’s case is applicable to the present case. It is binding on us in this case. Even if strictly it were not binding, we ought to follow it. That case was decided in the year 1934. It has stood, therefore, now for more than 43 years. So far as I know it has never been adversely commented upon. It is referred to in a number of textbooks, including some of those to which we were referred by Mr Neill; it is referred to in Halsbury’s Laws (4th Edition) Vol 12 under the title of Damages at paragraph 113…
I would add that, if I had taken a different view about that and had regarded it as not being binding upon this Court I would have felt very great difficulty in accepting that the alternative meaning as put forward by Mr Neill in his very ingenious and interesting argument was one that would be preferable or even acceptable in the context of the clause in this case.
Accordingly, taking the view that I do, that Parker J was right to hold that the word ‘consequential’ does not cover any loss which directly and naturally results in the ordinary course of events from late delivery, I would dismiss the appeal.’
Judges:
Megaw LJ
Citations:
[1978] 2 Lloyds Rep 55
Jurisdiction:
England and Wales
Citing:
Cited – Hadley v Baxendale Exc 23-Feb-1854
Contract Damages; What follows the Breach Naturaly
The plaintiffs had sent a part of their milling machinery for repair. The defendants contracted to carry it, but delayed in breach of contract. The plaintiffs claimed damages for the earnings lost through the delay. The defendants appealed, saying . .
Cited – Millar’s Machinery Co Ltd v David Way and Son CA 1935
The contract provided that the seller would make good certain defects in workmanship, but the sellers stated: ‘We do not give any other guarantee and we do not accept responsibility for consequential damages.’
Held: The purchaser recovered the . .
Cited – Millar’s Machinery Co Ltd v David Way and Son CA 1935
The contract provided that the seller would make good certain defects in workmanship, but the sellers stated: ‘We do not give any other guarantee and we do not accept responsibility for consequential damages.’
Held: The purchaser recovered the . .
Cited by:
Cited – Pegler Ltd v Wang (UK) Ltd TCC 25-Feb-2000
Standard Conract – Wide Exclusions, Apply 1977 Act
The claimant had acquired a computer system from the defendant, which had failed. It was admitted that the contract had been broken, and the court set out to decide the issue of damages.
Held: Even though Wang had been ready to amend one or . .
Cited – British Sugar Plc v NEI Power Projects Limited and Anr CA 8-Oct-1997
The plaintiffs contracted for the delivery and installation of equipment by the defendant. After delays and defects the claimants sought damages. The defendants said that the contract provided that any liabiity for consequential losses was to be . .
Lists of cited by and citing cases may be incomplete.
Damages
Updated: 14 May 2022; Ref: scu.238572