White and Carter (Councils) Ltd v McGregor [1961]

Court: House of Lords (UKHL)

Facts: White & Carter (Councils) Ltd entered into a three-year contract with McGregor's garage company to display advertisements on litter bins. McGregor's sales manager, Ward, renewed the contract without proper authority. When McGregor learned of this, he attempted to cancel the contract, but White & Carter refused and proceeded with the performance of the contract, later seeking payment.

Issue: Whether a claimant is obligated to mitigate losses in cases where the claim is for a contract price (debt), rather than damages, and if White & Carter were required to cancel the contract upon McGregor’s repudiation.

Held: The House of Lords held that White & Carter were entitled to recover the contract price and were not required to mitigate their losses. The claim was one for debt, not damages, and thus the obligation to mitigate did not apply.

Key Judicial Statement: Lord Hodson explained that claims in debt, unlike claims for damages, do not impose a duty to mitigate losses. The law does not compel the innocent party to accept repudiation and mitigate when claiming a contractual debt.

💡Leveluplaw: In cases involving a claim for the contract price (debt), there is no obligation for the innocent party to mitigate losses, even in cases of repudiation by the other party.