Measurement of Damages

In the case with Oliver Reed, when Reed breached the contract by failing to perform the leading role in the Anglia play production, he must have (reasonably) known at the time of the breach that Anglia would already have incurred pre-production costs. If that had been me breaking that contract, I could not have reasonably known about pre-production costs because I have no experience in the acting profession. But Oliver Reed did have that experience. So Anglia were therefore able successfully to claim their pre-production costs from Reed but were unable to claim their lost profits. Lord Denning explained that they could claim either loss of profits or for expenses incurred, but not for both. Given that the calculation of lost profit would be, by definition, at best an estimate, the more certain measure would be the pre-production costs actually incurred

I assume that your reference to Thompson v Robinson concerns the case Thompson v Robinson (Gunmakers) (There are a number of Thompson v Robinson cases!). The Gunmakers case involves a contract for the buying and selling of a Vanguard car. Thompson agreed to sell and Robinson agreed to buy. The sale would have realised a profit of £61 for Thompson. But Robinson refused to take delivery and disputed Thompson’s claim for lost profit. “How can the profit be lost when Thompson still has the car and can sell it to someone else and make that profit?”

But Thompson was able to show that the supply of Vanguard cars far exceeded their demand and, as the judge said, “If Thompson had been able to find another purchaser, that would have enabled Thompson to make two profits, not just the one”

Therefore Robinson had to compensate Thompson for his lost profit of £61

Is that better for you?

You’re welcome