## Facts

- Victoria Laundry (Windsor) Ltd. operated a laundry and dyeing business and sought to expand capacity in 1946.
- Newman Industries Ltd. contracted on April 26, 1946 to sell Victoria Laundry a large second-hand boiler for £2,150, with delivery set for June 5, 1946.
- Newman knew the buyer’s business and was told the boiler was intended to be put into use as quickly as possible.
- During dismantling by contractors engaged by Newman, the boiler was damaged, delaying delivery until November 8, 1946 (about five months late).
- Victoria Laundry claimed (1) ordinary lost profits from reduced capacity during the delay and (2) additional profits allegedly lost from particularly lucrative dyeing work, including a Ministry of Supply contract.
- The trial court rejected lost-profit damages as based on special circumstances not communicated; Victoria Laundry appealed.

## Issues

1. Whether delay in delivering the boiler made Newman liable for ordinary lost business profits during the period of delay.
2. Whether Newman was liable for exceptional profits allegedly lost from particularly lucrative contracts not specifically disclosed at contracting.

## Decision

- The Court of Appeal held Newman liable for ordinary lost profits caused by the delayed delivery.
- The court denied recovery for exceptional profits tied to particularly lucrative contracts (including the Ministry of Supply contract).
- The matter was sent for assessment of damages limited to profits reasonably expected from the boiler’s normal use in the expanded business.

## Legal Principles

- Contract damages are limited to losses that the breaching party could reasonably have contemplated, given information known (or reasonably imputed) at the time of contracting.
- A seller who knows it is supplying profit-producing equipment for prompt use can reasonably foresee that substantial delivery delay may cause ordinary lost profits; such loss is recoverable as a type of loss.
- Exceptionally high profits from special opportunities are a different type of loss and are too remote unless the special circumstances making those profits probable were communicated so the seller could be taken to have accepted that risk.
- The remoteness inquiry focuses on the kind of loss and the degree of likelihood reasonably contemplated, rather than treating all profit loss as automatically “special.”

## Conclusion

The Court of Appeal allowed damages for ordinary lost profits from late delivery of a boiler supplied for immediate business use, but treated unusually lucrative contract profits as too remote absent specific notice at the time of contracting.


Victoria Laundry (Windsor) Ltd. v. Newman Indus. Ltd., [1949] 2 K.B. 528 (C.A.)