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2005 UKHL 3
Tags: Contracts, Breach, Remedies, Foreseeability, D
tl;dr:
Plaintiff imported dog chews from Thailand and sold them to a business partner with a markup that it did not inform it about. Defendant bank negligently sent an invoice revealing Plaintiff’s markups to the partner, who then canceled the contract.Case Summary
In the case Jackson v. Royal Bank of Scotland (2005), the UK's highest court, the House of Lords, addressed the issue of whether damages for a breach of contract were too remote. The bank mistakenly shared sensitive information about one customer's business, revealing their profit margin from importing and selling dog chews to another customer, who then stopped doing business with the first customer.
The affected customer sued the bank for the loss of potential future profits. The House of Lords ruled that the loss of future profits was not too remote and could be recovered as damages for breach of contract. They applied a test of reasonable foreseeability, which needed a greater likelihood than in tort law cases. The court concluded that the bank should have known that this type of loss was "not unlikely" because it could occur in normal circumstances and was considered by both parties when they entered the contract.
This case is significant because it clarified the test for remoteness of damages in contract law, differentiating it from tort law. It also highlighted the courts' consideration of the parties' knowledge and expectations when determining if a loss is foreseeable. The case continues to be a relevant authority on this topic. [Word count: 199]
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