Dunlop v Lambert [1839]

Court: House of Lords

Facts: The case concerned goods lost at sea after a Bill of Lading was issued to the customer by the supplier. By the time the carrier breached the contract, ownership of the goods had already passed from the supplier to the customer. The issue arose over who could recover damages for the lost goods—the supplier or the customer—since the supplier no longer had ownership of the goods at the time of loss.

Issue: Can the supplier, who no longer owns the goods, recover damages from the carrier for the loss of the goods on behalf of the customer?

Held: The House of Lords established an exception to the general rule regarding damages. The supplier could recover damages from the carrier, even though ownership of the goods had passed to the customer. This was based on the understanding that the supplier was contracting for the benefit of the customer and could seek compensation on their behalf.

Key Judicial Statement: "The supplier is entitled to recover damages for losses suffered by the customer, as it was contemplated by the parties that the contract was made not only for the supplier’s benefit but also for the ultimate beneficiary of the goods."

💡Leveluplaw: This case introduced an important exception to the general rule of privity in contract law, allowing a party to claim damages on behalf of a third party when it is clear that the contract was made for their benefit. It acknowledges commercial realities where contracts often involve benefits for third parties not directly part of the contract.