Monarch Steamship Co Ltd v Karlshamns Oljefabriker A/B: HL 1949

Damages were sought for breach of contract.
Held: After reviewing the authorities on remoteness of damage, the court reaffirmed the broad general rule that a party injured by the other’s breach of contract is entitled to such money compensation as will put him in the position in which he would have been but for the breach. The matters did not depend on the differences (if any) between contract and tort in that connection. The reasonable contemplation as to damages was what the court attributed to the parties and the question in such a case must always be what reasonable business men must be taken to have contemplated as the natural or probable result if the contract was broken. The question of whether the damage was foreseeable is a question of fact.
Lord Wright said: ‘Causation is a mental concept, generally based on inference or induction from uniformity of sequence as between two events that there is a causal connection between them . . The common law, however, is not concerned with philosophic speculation, but is only concerned with ordinary everyday life and thoughts and expressions . .’

Lord Wright
[1949] AC 196, [1948] UKHL 1, 65 TLR 217, 1949 SC (HL) 1, [1949] AC 196, 1949 SLT 51, (1948-49) 82 Ll L Rep 137, [1949] LJR 772, [1949] 1 All ER 1
Cited by:
CitedLagden v O’Connor HL 4-Dec-2003
The parties had been involved in a road traffic accident. The defendant drove into the claimant’s parked car. The claimant was unable to afford to hire a car pending repairs being completed, and arranged to hire a car on credit. He now sought . .
CitedChester v Afshar HL 14-Oct-2004
The claimant suffered back pain for which she required neurosurgery. The operation was associated with a 1-2% risk of the cauda equina syndrome, of which she was not warned. She went ahead with the surgery, and suffered that complication. The . .
CitedTransfield Shipping Inc v Mercator Shipping Inc (The Achilleas) HL 9-Jul-2008
The parties contracted to charter the Achileas. The charterer gave notice to terminate the hire, and the owner found a new charterer. Until the termination the charterers sub-chartered. That charter was not completed, delaying the ship for the . .
CitedCounty Ltd v Girozentrale Securities CA 1996
The plaintiff bank had agreed to underwrite a share placement. The defendant brokers made representations to potential investors outside and in breach of the terms of the engagement letter. The bank failed to check on the status of indicative . .
CitedBorealis Ab v Geogas Trading Sa ComC 9-Nov-2010
The parties had contracted for sale and purchase of butane for processing. It was said to have been contaminated. The parties now disputed the effect on damages for breach including on causation, remoteness, mitigation and quantum.
Held: The . .
CitedKpohraror v Woolwich Building Society CA 1996
The Society, acting as a bank, had at first failed to pay its customer’s cheque for andpound;4,550, even though there were sufficient funds. The bank said that it had been reported lost. The customer sought damages to his business reputation.
Damages, Negligence, Contract

Updated: 17 November 2021; Ref: scu.188648