Victoria Laundry Ltd v Newman Industries Ltd [1949] 2 KB 528 is an English contract law

English contract law

English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

 case on the remoteness

Remoteness

Remoteness in English law is a set of rules in both tort and contract, which limits the amount of compensatory damages for a wrong.In negligence, the test of causation not only requires that the defendant was the cause in fact, but also requires that the loss or damage sustained by the claimant was...

 of damage principle.

Facts

Newman Industries Ltd was meant to deliver a boiler for Victoria Laundry (Windsor) Ltd. The delivery was five months late. As a result of not having enough laundry capacity, Victoria Laundry lost a lucrative cleaning contract from the Ministry of Supply

Ministry of Supply

The Ministry of Supply was a department of the UK Government formed in 1939 to co-ordinate the supply of equipment to all three British armed forces, headed by the Minister of Supply. There was, however, a separate ministry responsible for aircraft production and the Admiralty retained...

. Victoria Laundry sued for the ordinary profit that it had forgone through not having the boiler on time. The question was whether it could also claim the extraordinary profit it would have made, had it been able to take advantage of the lucrative Ministry of Supply contract.

Judgment

Asquith LJ in the Court of Appeal held that Newman Industries only had to compensate for the ordinary, not the extraordinary loss of profits. He distinguished (at p 543) losses from “particularly lucrative dyeing contracts” as a different type of loss which would only be recoverable if the defendant had sufficient knowledge of them to make it reasonable to attribute to him acceptance of liability for such losses. The vendor of the boilers would have regarded the profits on these contracts as a different and higher form of risk than the general risk of loss of profits by the laundry.

See also

• Hadley v Baxendale (1854) 9 Exch 341
• Koufos v Czarnikow Ltd or The Heron II [1969] 1 AC 350
• Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd
  Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd
  Parsons Ltd v Uttley Ingham & Co Ltd [1978] QB 791 is an English contract law case, concerning remoteness of damage. In it, the majority held that losses for breach of contract are recoverable if the type or kind of loss is a likely result of the breach of contract...
  
  [1978] 1 QB 791
• South Australia Asset Management Co v York Montague [1996] 3 All ER 365
• The Achilleas [2008] UKHL 48