Court case[1949] 2 KB 528

The laundry, wishing to expand its business, bought a large second-hand boiler from Newman Industries, who knew it was wanted for immediate use in the laundry's business. The boiler was damaged while being dismantled and was delivered five months late. The laundry claimed the profits it would have earned in those months, including from some exceptionally lucrative dyeing contracts with the Ministry of Supply of which the sellers knew nothing.

The Court of Appeal (Asquith LJ) held that the laundry could recover the ordinary profits it would have earned by using the boiler, since the sellers, knowing the buyer's business and the purpose of the boiler, must reasonably have contemplated that delay would cause some loss of business. But the loss of the exceptionally profitable Ministry contracts was not recoverable, because the sellers had no knowledge of them and such loss was not reasonably foreseeable. The judgment restated Hadley v. Baxendale as a single principle: the defendant is liable for such loss as was, at the time of the contract, reasonably foreseeable as liable to result from the breach, having regard to the knowledge, actual or imputed, that he then possessed.