Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978]

Court: Court of Appeal

Facts: Parsons, a pig farming company, purchased bulk food storage hoppers from Uttley Ingham & Co. Due to an oversight during installation, the ventilator top of one hopper remained sealed, causing the stored pignuts to become mouldy. Parsons continued feeding the mouldy pignuts to their pigs, leading to an outbreak of E. coli, which killed many pigs and caused significant financial losses.

Issue: Was the financial loss suffered by Parsons due to the death of the pigs too remote to be recoverable under the contract?

Held: The Court of Appeal held that the loss was not too remote, allowing Parsons to recover damages. Scarman LJ and Orr LJ emphasized that the type of loss, rather than the specific outcome, was foreseeable and that the test for remoteness should not vary between contract and tort. Lord Denning MR, while agreeing with the outcome, suggested a distinction between economic loss and physical damage, proposing a more restrictive test for economic loss.

Key Judicial Statement: Scarman LJ and Orr LJ affirmed that "the test of remoteness in contract should focus on the foreseeability of the type of loss, regardless of the cause of action, whether contract or tort."

💡Leveluplaw: This case explores the remoteness of damages in contract law, reaffirming that the type of loss must be foreseeable at the time of contract formation. It also highlights the differing judicial opinions on how to handle economic losses versus physical damage, showing the evolving nature of contract law's remoteness rules.