Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528

Court: Court of Appeal

Facts: Newman Industries delayed the delivery of a boiler by five months, which caused Victoria Laundry to lose profits, including a lucrative government contract.

Issue: Could Victoria Laundry recover both ordinary profits and extraordinary profits from the loss of the government contract?

Held: The court held that Victoria Laundry could recover for ordinary loss of profits, but the extraordinary losses from the government contract were not recoverable since Newman Industries was not aware of them at the time of the contract.

Key Judicial Statement: Asquith LJ clarified that for extraordinary losses to be recoverable, the breaching party must have had sufficient knowledge of the potential for such losses at the time the contract was made.

💡 LevelUpLaw: Damages for breach of contract are limited by the principle of foreseeability. Ordinary losses are recoverable, but extraordinary losses must be in the contemplation of both parties at the time of contracting.