Civil Engineering Reference
In-Depth Information
ordinary knowledge as an average person in that situation, or whether he
had special knowledge which, had he considered the matter, would have
led him to the conclusion that greater (or perhaps less) than the ordinary
loss would result from the breach.
It seems that it is enough if the type of loss is within the reasonable
contemplation of the parties even though the
extent
of such loss is far greater
than they could have contemplated. In
H
.
Parsons (Livestock) Ltd
v.
Utley
Ingham & Co Ltd
263
a herd of pigs became ill with a serious disease as a result
of a faulty pig-nut silo. In the ordinary course of events only a relatively
minor illness might have been expected to result. The court held that it
would not limit the defendants' liability because it was reasonable to sup-
pose that the parties would have contemplated at the time of contract that,
in the event of the silo being defective, there was a serious possibility of
illness and even death among the pigs.
In practice, these concepts often lead to real difficulties of interpretation.
In
Saintline Ltd
v.
Richardsons, Westgarth & Co Ltd
264
, Atkinson J discussed
the distinction between direct and consequential loss or damage. He had
there to consider the meaning of a contract clause providing that a manu-
facturer's liability should not 'extend to any indirect or consequential dam-
ages whatsoever'. The contract was for the supply of engines to a ship, and
the manufacturers broke the contract. The buyers claimed damages for loss
of profit for the time they were deprived of the use of the ship, together with
the expenses of wages etc., and for the fees paid to experts for superintend-
ence. The judge held that all these items were recoverable as being a direct
and natural consequence of the breach of contract. In giving judgment he
said:
'What does one mean by ''direct damage''? Direct damage is that which
flows naturally from the breach without other intervening cause and
independently of special circumstances . . . The words ''indirect or conse-
quential'' do not exclude liability for damages which are the direct and
natural result of the breaches complained of . . . [The clause protects] the
respondents from claims for special damages which would be recover-
able only on proof of special circumstances and for damages contributed
to by some supervening cause.'
265
A construction industry case where the same distinction was drawn is
Croudace Construction Ltd
v.
Cawoods Concrete Products Ltd
266
. The claimants
were main contractors for the erection of a school and they contracted with
the defendants for the supply and delivery of masonry blocks. It was a term
of the supply contract that the defendants were 'not under any circumstan-
ces . . . liable for any consequential loss or damage caused or arising by
reason of late supply or any fault, failure or defect in any materials or
goods supplied by us . . . '.
263
[1977] 2 Lloyds Rep 522.
264
[1940] 2 KB 99.
265
[1940] 2 KB 99 at 103 per Atkinson J.
266
(1978) 8 BLR 20.
