Victoria Laundry (
2 K.B. 528 (1949)
Facts: The plaintiffs contracted to buy a boiler from the defendants. The boiler was delivered several months late. The plaintiffs sued for lost profits.
Issue: What part of the plaintiff’s profits can they recover?
Rule: When there is a breach of contract, the breaching party should be liable for damages that naturally arise from the breach, or damages that both of the parties contemplated at the time they made the contract.
Analysis: The court says it is reasonable to think that since the defendant knew that the plaintiff was in the laundry business, it was foreseeable that the lack of a boiler would keep them from receiving the profits laundry people usually get. The engineering company cannot plead ignorance as to what the boiler was for because any reasonable person would understand that it is essential to their business.
Conclusion: The court awarded the plaintiff damages for its ordinary profits but not for special dyeing contracts that the defendant didn’t know about.