Anglia Television Ltd. v. Reed

3 All E.R. 690 (Court of Appeal, 1971).

Dawson, pp. 96-97

 

Facts: Anglia contracted with Reed to be in a TV movie.  Reed breached after he found out he was double-booked.  Anglia sued for reliance damages, including expenses incurred before the contract was made.  At trial, the full measure of damages was awarded.

 

Issue: Can the plaintiff collect reliance damages for expenses incurred before making the contract on which the plaintiff relied?

 

Rule: When lost profit can’t be proved, a plaintiff is entitled to recover reliance damages.

 

Analysis: The court is wrong, wrong, wrong when it says that “[t]he aggrieved party cannot recover both lost profits and wasted expenditures and must elect between them”.

 

The court argues that at the time of contract formation, the defendant knew that the plaintiff had already spent money setting up the production.  Thus the defendant could have foreseen that breaching the contract would cause the plaintiff to lose out on the money they’d spent so far.

 

Question

 

The evidence mentioned in the hypothetical would tend to show that the wages paid to secretaries were actually fixed rather than variable and thus would not contribute to reliance damages.  In this factual pattern, the money for secretaries would have been spent anyway, and thus they wouldn’t have truly spent it in reliance on Dempsey’s performance.

 

Conclusion: The judgment of the trial court was upheld.

 

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