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Transfield Shipping Inc v Mercator Shipping Inc [2008] UKHL 48

Facts:

P owner of vessel and lent it out to D. P had rented it out to another company at a fixed price for a day after D was suppose to return vessel. D returned vessel late. Owners had to lower the price to change the date and therefore lost money. P claims for damages for loss of difference between original rate and reduced rate

Issue(s):

Are the plaintiffs entitled to cover for loss of profit?

Ratio:

If a party cannot reasonably have been assumed to accept a risk, then they are not liable for that risk.
Must look at the type or kind of loss for which the contract-breaker ought fairly to have accepted responsibility.

Analysis:

The loss was not of ordinary consequence

Holding:

You can’t hold the defendant liable, because it is unforeseeable at the time of the contract that they assumed responsibility of this risk. P entitled to difference between market price and contract price at date of breach.


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