1. Robinson v Harman (1848) 1 Exch 850 at 855 per Parke B. See also Engel v Fitch (1868) LR 3 QB 314 at 333; Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 at 39; Wertheim v Chicoutimi Pulp Co [1911] AC 301 at 307; British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673 at 689; and Monarch SS Co Ltd v Karlshamms Oljefabriker [1949] AC 196 at 220.

2. Earlier decisions had already laid the foundations for this approach. See, eg, Hopkins v Grazebook (1826) 6 B & C 31 at 34, where Bayley J recognised that damages should compensate the victim for ‘not having that for which he contracted’.

3. Courts will not take account of ‘the expectations, however reasonable, of one contractor that the other will do something that he has assumed no legal obligation to do’: Lavarack v Woods of Colchester Ltd [1967] 1 QB 278 at 294 per Diplock LJ. Thus, Robinson v Harman must be read in the light of the subsequent decision in Hadley v Baxendale (1853) 9 Exch 341 otherwise the claimant would be provided with ‘a complete indemnity for all loss… resulting from a particular breach, however improbable, however unpredictable’ (Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 at 539 per Asquith LJ). For a more modern example, see Bence Graphics International Ltd v Fasson UK Ltd [1988] QB 87 (CA), especially at 103.

4. See, generally, Dawson, F General damages in contract for non-pecuniary loss 1983] 10 NZLU 232 Google Scholar; ; ; ; and

5. [1991] 1 WLR 1421 at 1445.

6. Bingham LJ’s comments were approved by the House of Lords in Johnson v Gore Wood & Co [2002] 2 AC 1 at 49 and Farley v Skinner [2001] UKHL 49, [2002] 2 AC 732 at [14] and [73]–[75]. See also Branchett v Beaney, Coster & Swale Borough [1992] 3 All ER 910 at 916 (CA); R v Investors Compensation Scheme Ltd, ex p Bowden [1994] 1 WLR 17 at 28; Channon v Lindley Johnstone [2002] EWCA Civ 353, [2002] Lloyd’s Law Rep PN 342 at [50]–[53]; and, most recently, Hamilton Jones v David & Snape [2003] EWHC 3147, [2004] 1 WLR 924 at [62].

7. Watts, above n 5, at 1445. A well-known exception to this principle is the recovery for pain, suffering and loss of amenity; see, generally, H McGregor McGregor on Damages (London: Sweet & Maxwell, 2003), especially at para 3-017/8. Note: this paper will focus on the two exceptions set out by Bingham LJ in Watts (see below, nn 8 and 9).

8. See the earlier decision in Bliss v South East Thames Regional Health Authority [1987] ICR 700 at 718, in which damages were limited to contracts designed to ‘provide peace of mind or freedom from distress’ (per Dillon LJ), although in Hayes v James & Charles Dodd [1990] 2 All ER 815 at 824b, Staughton LJ suggested that this statement might be unduly narrow.

9. Physical inconvenience is one of the earliest forms of recoverable non-pecuniary loss in a breach of contract action; see Burton v Pinkerton (1867) LR 2 Exch 340 and Hobbs v London and South Western Railway Co (1875) LR 10 QB 111. However, damages for mental distress consequent on physical inconvenience are of more recent origin; see McCall v Abelesz [1976] QB 585 and Perry v Sidney Phillips & Son [1982] 1 WLR 1297 (CA).

10. See, generally, Hadley v Baxendale (1854) Ex 341; Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 (CA); and Koufos v C Czarnikow Ltd, The Heron II [1969] 1 AC 350 (HL).

11. This type of non-pecuniary benefit is sometimes referred to as a ‘consumer surplus’ but the term is probably better viewed as overlapping with the first exception in Watts rather than encompassing it – see the final part of this paper.

12. For example Jarvis v Swans Tours Ltd [1973] QB 233 at 239 per Edmund Davies LJ: ‘The court is entitled, and indeed bound, to contrast the overall quality of the holiday so enticingly promised with that which the defendants in fact provided’. Presumably, the wider the gap between the expected contract value and the actual value received, the greater the damages recoverable (subject to the principles of remoteness).

13. It is respectfully submitted that the manner in which Bingham LJ framed the second exception (viz that remoteness was the sole arbiter for recovery of damages for physical inconvenience) is of dubious heritage and will be questioned later in this paper.

14. The precise extent, constituents or even justification for this oft-repeated ‘policy’ remain difficult to decipher (see below, n 22) leading Mason CJ to conclude that the foundations of the policy were indeed ‘flimsy’: Baltic Shipping Company v Dillon [1992–93] 176 CLR 344 at 362 (High Court of Australia). Remoteness principles can also be viewed as a vehicle for ‘policy’, albeit that it concentrates on the known, objectively verifiable factual matrix existing at the time of contract formation.

15. For example Cox v Philips Industries Ltd [1976] QB 138, especially at 146, doubted in Hutchinson v Harris (1978) 10 BLR 24 at 39 (CA), and overruled in Bliss, above n 8, especially at 718. See also Franks & Collingwood (A Firm) v Gates (1985) 1 Con LR 21; Perry v Sidney Phillips & Son [1982] 1 WLR 1297 at 1302 (CA); Heywood v Wellers [1976] QB 446 at 461 (CA); Ichard v Frangoulis [1977] 1 WLR 556.

16. See Burrows, above n 4, especially at 121; cf Johnson v Unisys Ltd [2001] UKHL 13, [2003] 1 AC 518 at [70] in which Lord Millett emphasises the central role performed by remoteness in this area, an approach often adopted in other Commonwealth jurisdictions, eg Newell v Canadian Pacific Airlines Ltd (1976) 74 DLR (3d) 574.

17. Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344 (HL) and Farley v Skinner, above n 6. See also Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1 AC 518 (HL), especially at 534D–E.

18. Usually a consumer of goods or services.

19. This paper concentrates on liability arising from breaches of contract that cause distress, disappointment and inconvenience, with any award potentially covering nervous shock and low-level psychiatric injury. However, losses flowing from a contract breach that fall within the standard category of ‘pain and suffering’ (eg Griffin v Pillet [1926] 1 KB 17; Summers v Salford Corporation [1943] AC 283; Wales v Wales (1967) 111 SJ 946; Maylon v Lawrance Messer & Co [1968] 2 Lloyd’s Rep 539), or potentially give rise to a separately identifiable tortious action based on nervous shock, fall outside the scope of this paper.

20. However, even in the nineteenth century, courts were prepared to make exceptions and compensate for injured feelings in special circumstances, eg Finley v Chirney (1888) 20 QBD 495 (breach of promise of marriage).

21. See Attia v British Gas [1988] QB 304 (CA), especially at 312G, and, in relation to breach of contract, the more pithy comment of Lord Cooke of Thorndon in Johnson v Gore Wood, above n 6, at 49: ‘Contract-breaking is treated as an incident of commercial life which players in the game are expected to meet with mental fortitude’.

22. See, generally, Aggravated, Exemplary and Restitutionary Damages Law Com No 132 (HMSO, 1993) and Capper, D Damages for distress and disappointment – the limits of Watts v Morrow 2000] 116 LQR 553 Google Scholar. Alternative explanations for the ‘policy’ include the historical view of contracts as being commercial transactions involving solely business risks (eg Sunley v Cunard White Star[1939] 2 KB 791, especially at 799, and its modern re-affirmation by Lord Millett in Johnson v Unisys, above n 16, at [70]); the general assumption that a defendant rarely promises to protect the claimant from suffering inconvenience as a consequence of a breach (eg Hamlin v Great Northern Railway Co Hamlin (1856) 1 H&N 408 at 411 per Pollock CB and Hobbs, above n 9, at 122); or even that compensation for inconvenience is tantamount to awarding ‘exemplary damages’ (eg Addis v Gramophone Co Ltd[1909] AC 488, especially at 493 and 497, and British Guiana Credit Corporation v Da Silva[1965] 1 WLR 248 at 259 (JPC)).

23. [1909] AC 488.

24. For example Groom v Crocker [1939] 1 KB 194 (CA), especially at 205 and 224–225, and the influential judgment of Dillon LJ in Bliss, above n 8, especially at 718.

25. Addis, above n 23, at 496.

26. [1920] AC 102.

27. Ibid, at 132. Note also the limited interpretation of Addis in Commonwealth jurisdictions, eg Brown v Waterloo Regional Board of Commissioners of Police (1982) 136 DLR (3d) 49, especially at 56 (reversed on other grounds – (1983) 150 DLR (3d) 729) and Whelan v Waitaki Meats Ltd [1991] 2 NZLR 74, especially at 88–89.

28. More recent obiter comments in the House of Lords suggest support for restricting the ambit of Addis; eg Mahmud v Bank of Credit and Commerce International SA [1998] AC 20 at 51 per Lord Steyn; Johnson v Unisys, above n 16, at [44] and [70] per Lord Hoffmann and Lord Millett respectively; and, Johnson v Gore Wood, above n 6, at 50 per Lord Cooke of Thorndon.

29. For example Heywood v Wellers, above n 15, especially at 461, where James LJ emphasised that liability arose from proof that the services performed were ‘intended’ to prevent the client experiencing such ‘vexation, frustration or distress’. Higher authority for this approach can actually be traced back to 1851 in Kemp v Sober 1 Sim (NS) 517 at 520 per Lord Cranworth LC.

30. (1971) SLT (Sh Ct) 49.

31. See also the earlier US case of Lewis v Holmes 109 La 1030 (1903) in which damages were awarded for the bride’s disappointment in not receiving her trousseau, as had been agreed, before her wedding – cited in Yates, D ‘Damages for non-pecuniary loss’ (1973) 36 Mod L Rev 535 Google Scholar at 537.

32. See Jarvis v Swan Tours, above n 12. Earlier authority to similar effect can be found (eg Stedman v Swan’s Tours Ltd (1951) 95 SJ 727), with county courts having already adopted the same approach (eg Feldman v Allways Travel Service [1957] CLY 934). The decision in Jarvis eventually received almost universal approval in other Commonwealth jurisdictions (eg (Canada) Newell v Canadian Pacific Airlines Ltd (1976) 74 DLR (3d) 574 and Vorvis v Insurance Commissioner of British Columbia (1989) 58 DLR (4th) 193 – cf PA Wourmell Contracting Limited v Allen (1979) 100 DLR (3d) 62; (New Zealand) Byrne v Auckland Irish Society Inc [1979] 1 NZLR 351; and (Australia) Baltic Shipping Company v Dillon [1992–93] 176 CLR 344).

33. See Heywood v Wellers, above n 15.

34. See Jackson v Chrysler Acceptances Ltd [1978] RTR 474 (CA); cf Alexander v Alpe Jack Rolls Royce Motor Cars Ltd [1996] RTR 95 (CA), especially at 101b, where the court refused damages for distress, anxiety and inconvenience caused by an improperly repaired Rolls Royce car.

35. Above n 5, at 1445 (emphasis added). The basic ingredients of this test had already been set out by Dillon LJ in Bliss, above n 8, at 717–718 (followed in Hayes, above n 8, especially at 824b). By 1992, in Apostolos Konstantine Ventouris v Trevor Rex Mountain (The ‘Italia Express’ No 2) [1992] Lloyd’s Law Rep 281 at 293, Hirst J could state with confidence that the approach adopted in Hayes and Bliss was ‘very well settled’.

36. See Jarvis v Swans Tours, above n 12, at 240, for Stephenson LJ’s integrated measure/remoteness test: ‘What damage has the plaintiff suffered for the loss to him which has resulted from the defendants’ breaches of this winter sports holiday contract and was within the reasonable contemplation of the parties to this contract as a likely result of its being so broken?’.

37. See, eg, Branchett v Beaney, Coster & Swale Borough, above n 6, where the court was prepared, obiter, to look at a covenant of quiet enjoyment in isolation from the central object of the whole tenancy agreement.

38. (1995) 45 Con LR 127 (CA). Compare this with Hutchinson, above n 15, at 37 per Stephenson LJ: ‘[In] these days, we have reached a point where damages would have been properly awarded, as the judge thought, for any distress which had been caused to the plaintiff by her being kept out of her own house and home through having to do extensive repairs to it’.

39. Interestingly, Commonwealth judges have been more prepared to move from a purely objects-based test to one based more on the contracted-for expectations; eg Baltic Shipping Company v Dillon [1992–93] 176 CLR 344 at 362 per Brennan J.

40. See the final part of this paper as regards double recovery by the claimant.

41. For example The Mediana [1900] AC 113 at 117 (HL); Voaden v Champion (The ‘Baltic Surveyor’ and ‘Timbuktu’) [2002] EWCA Civ 89, [2002] 1 Lloyd’s Rep 623, especially at [100]; and the interesting analysis adopted by Vautier J in Vyrne v Auckland Irish Society Inc [1979] 1 NZLR 351 at 364–366 (involving the loss of entertainment rights by a wrongly expelled club member).

42. [1996] AC 344.

43. Above n 6.

44. [1996] AC 344 at 374B per Lord Lloyd of Berwick. In Farley, above n 6, at [21], Lord Steyn assumed that the damages covered ‘the plaintiff’s disappointment in not receiving the swimming-pool he desired’ (emphasis added).

45. Ibid, at 360H–361B per Lord Mustill, and at 374E per Lord Lloyd of Berwick (offering an alternative justification for the award). In Farley, above n 6, at [79], Lord Scott of Foscote assumed that the above two extracts represented the true ratio of Ruxley, with damages compensating the plaintiff for the deprivation of an intended benefit.

46. Ibid, at 374B per Lord Lloyd of Berwick; cf Lord Mustill’s more expansive approach at 360. Subsequently, in Farley, above n 6, at [21], Lord Steyn said that he was ‘satisfied that the principles enunciated in Ruxley’s case in support of the award of £2,500 for a breach in respect of the provision of a pleasurable amenity have been authoritatively established’.

47. Ibid, at 374B, recognising that this exception to Addis was subject to ‘the object of the contract [being] to afford pleasure’. See also the similar approach adopted in Johnson v Gore Wood, above n 6, especially at 37–38 and 42.

48. See, generally, Harris, D, Ogus, A and Philips, J Contract remedies and the consumer surplus’ (1979) 95 LQR 581.Google Scholar

49. Above n 42, at 358C.

50. Ibid, at 361A–B.

51. Ibid, at 360H.

52. Ibid, at 365E.

53. Ibid, at 360.

54. Ibid, at 353A per Lord Keith of Kinkel, at 354F per Lord Bridge of Harwich, and at 359F per Lord Mustill, who all agreed with Lord Lloyd of Berwick’s views.

55. Above n 42, at 374. His Lordship placed specific reliance upon the comment of Sir David Cairns in G W Atkins Ltd v Scott (1991) 7 Const LJ 215 at 221 (CA): ‘There are many circumstances where a judge has nothing but his common sense to guide him in fixing the quantum of damages, for instance, for pain and suffering, for loss of pleasurable activities or for inconvenience of one kind or another’.

56. See, in particular, the comments of Oliver J in Radford v De Froberville [1977] 1 WLR 1262 at 1270.

57. Above n 42, at 360D. Cf McKendrick, E, ‘Breach of contract and the meaning of loss’ (1999) 52 Current Legal Problems 37 CrossRefGoogle Scholar, especially at 44, where the author suggests that Lord Lloyd of Berwick’s speech displayed some hesitancy in recognising the protection of disappointed expectations and was therefore more limited than the approach adopted by Lord Mustill. Interestingly, whilst Lord Mustill agreed with Lord Lloyd’s reasoning, such sentiments were not expressly reciprocated by Lord Lloyd.

58. See, eg, Burrows, AS Remedies for Torts and Breach of Contract (Oxford: Oxford University Press, 2004) p 326.Google Scholar

59. The majority in the Court of Appeal were content to follow the Watts test literally. According to Stuart Smith LJ, [2000] Lloyd’s Rep PN 516 at 521, as the obligation undertaken by the surveyor was a ‘relatively minor aspect of the overall instructions’, there was no scope for awarding damages for ‘disappointment’, even though the plaintiff’s loss was contemplated by both sides, and flowed from a failure to perform a separately identified task known to be important to the plaintiff.

60. See Farley, above n 6, at [24] per Lord Steyn, at [32] per Lord Browne-Wilkinson, at [54] per Lord Hutton, and at [41]–[42] per Lord Clyde. Lord Scott of Foscote side-stepped this issue by advocating a different categorisation of non-pecuniary loss at [86], although at [110] his Lordship hints at an even broader application of the Watts principles predicated simply on the principle of remoteness.

61. Ibid, at [24]. See Capper, above n 22, at 556.

62. Ibid, at [41].

63. According to Lord Steyn, ibid, at [17], the first Watts exception referred to the ‘reasonable expectations of the parties under the specific terms of the contract’.

64. Ibid, at [54]. This approach seemingly addresses one of the previously stated deficiencies in Watts: namely, the uncertainty as to whether the object of the contract is determined by what the archetypal consumer expects to gain from proper performance or by the consumer’s individual expectation of performance. Clearly Lord Hutton favoured the latter approach.

65. Note that Lord Browne-Wilkinson, ibid, at [32], also approved the reasoning contained in Lords Steyn and Scott’s speeches.

66. Ibid, at [44], with Lord Clyde emphasising the ‘object of the [claimant’s] request’ and the manner in which the defendant contemplated the claimant’s use of the ensuing information.

67. Ibid, at [15] where Lord Steyn downgraded the linguistic unimpeachability of Bingham LJ’s formulation in Watts by stating it was only a ‘helpful point of departure for the examination of the issues in this case’. In particular, at [24], his Lordship was prepared to widen the Watts test by incorporating any other ‘major or important object [designed to] give pleasure, relaxation or peace of mind’.

68. The decision in Knott v Bolton was unanimously disapproved of; see Lord Steyn, ibid, at [24]; Lord Clyde at [41]; Lord Hutton at [52]; and Lord Scott of Foscote at [93] (albeit for different reasons).

69. In Australia, where the ‘object’ test remains the norm, some judges have been prepared to make this jump towards ‘terms’. See, eg, Baltic Shipping Company v Dillon, above n 14, at 362 per Brennan J: ‘If a contract contains a promise, express or implied, that the promisor will not cause the promise, or will protect the promise from, disappointment of mind, it cannot be said that the disappointment of mind resulting from the breach of promise is too remote’.

70. [1976] 1 WLR 638. The decision was subsequently overruled in Bliss, above n 8; see also O’Laoire v Jackel International Ltd (No 2) [1991] IRLR 170 (CA).

71. See Heywood v Wellers, above n 15, especailly at 463H–464A, Hayes v Dodd, above n 8, and W v Egdell and Others [1990] Ch 359. Contrast this with the earlier, remoteness-based approach adopted by Lord Denning MR in Perry v Sidney Phillips & Son (A Firm) [1982] 1 WLR 1297 at 1302–1303: ‘He may, as here, not have the money to repair it and this will upset him all the more. That too is reasonably foreseeable. All this anxiety, worry and distress may nowadays be the subject of compensation’.

72. Cox, above n 70, at 644.

73. See, eg, Burrows, above n 4, especially at 122–123. See the final part of this paper for a fuller discussion.

74. See Falko v James McEwan & Co Pty Ltd[1977] VR 447 where compensation for inconvenience was denied as it was an ‘ordinary commercial contract’. Cf Johnson v Unisys, above n 16, at 532, in which Lord Steyn argued that employment contracts should not be equated with simple commercial contracts, and similar comments in Beale, H ‘Exceptional measures of damages in contract’ in Birks, P (ed) Wrongs and Remedies in the Twenty-First Century (Oxford: Clarendon Press, 1996) p 230.Google Scholar

75. Note recent case-law suggesting that if an employee has suffered a recognisable psychiatric illness as a consequence of mistreatment by an employer (constituting a breach of the implied term of mutual trust and confidence), compensation is available provided the mistreatment does not form an integral link in the chain of events leading up to a dismissal; eg Eastwood v Magnox Electric plc; McCabe v Cornwall County Council [2004] UKHL 35, [2004] 3 WLR 322.

76. See above n 6, at [44] where Lord Hutton concluded: ‘It would be within the contemplation of the defendant that if the noise was such as to interfere with the occupier’s peaceful enjoyment of the property the plaintiff would either not buy it at all or live there deprived of his expectation of peace and quiet’ (emphasis added).

77. Ibid, at [17] per Lord Steyn: ‘the issue whether the present case falls within the exceptional category governing cases where the very object of the contact is to give pleasure, and so forth, focuses directly on the terms actually agreed between the parties. It is concerned with the reasonable expectations of the parties under the specific terms of the contract’ (emphasis added).

78. Eg The Heron II, above n 10, especially at 386A and Mulvenna v Royal Bank of Scotland plc [2003] EWCA Civ 1112, [2004] CP Rep 8, especially at [23]–[26]. See also British Columbia and Vancouver Island Spar Lumber and Sawmills Company Limited v Nettleship (1868) LR 3 CP 499, especially at 509 per Willes J: ‘The mere fact of knowledge cannot increase the liability. The knowledge must be brought home to the party so charged, under such circumstances that he must know that the person he contracts with reasonably believes that he accepts the contract with the special condition attached to it’.

79. See Jarvis v Swans Tours, above n 12, at 239D, and the travel agents’ assurance that the holiday would be of a certain quality: ‘If in such circumstances travel agents fail to provide a holiday of the contracted quality, they are liable in damages’ (per Edmund-Davies LJ). This common law approach has been somewhat changed by the Package Travel, Package Holidays and Package Tours Regulations 1992, SI 1992/3288.

80. See also Wilson v United Counties Bank Limited [1920] AC 102 at 132 per Lord Atkinson.

81. Above n 10 at 354 per Alderson B.

82. Adcock v Blue Sky Holidays Ltd (unreported) 13 May 1980.

83. Above n 10, at 354 per Alderson B. See, eg, Kemp v Intasun Holidays Ltd [1987] BTLC 353, 7 Tr Law 161 (CA), in which a ‘casual’ conversation with a travel agent regarding the medical condition of one of the plaintiffs was insufficient to create any additional liability arising from the provision of sub-standard accommodation leading to a significant aggravation of that medical condition.

84. Above n 6.

85. Ibid, at [61].

86. Above n 12, at 238.

87. A similar analysis can be found in Ramsay, I Damages for mental distress – injury to feelings 1977] 55 Can Bar Rev 169 Google Scholar at 174. See also Herne Bay Steamboat Co v Hutton[1903] 2 KB 683 where a similar hypothetical example was used to show that the cancellation of the ‘event’ would not frustrate the contract unless the cab owner had been made aware of the hirer’s intentions before the contract was formed.

88. See, generally, Jarvis v Swan Tours, above n 12, and Jackson v Horizon Holidays Ltd [1975] 1 WLR 1468 (CA).

89. Heywood v Wellers, above n 15.

90. [1994] 2 Lloyd’s Rep 161.

91. Ibid, at 166.

92. (1868) LR 3 QB 181, especially at 187, and cited with approval in Victoria Laundry (Windsor) Ltd v Newman Industries Ltd [1949] 2 KB 528 at 538–539 (CA).

93. For example British Westinghouse, above n 1, especially at 688–689 per Viscount Haldane LC.

94. Ruxley, above n 17, at 370H.

95. See, eg, Lord Steyn’s comments in Farley, above n 6, at [16].

96. In Hobbs, above n 9, at 116, Cockburn CJ considered defence counsel’s argument that the plaintiff’s extended walk, caused by being set off at the wrong station, was more ‘imaginary’ than real and was not something that a person of normal health and constitution would necessarily dislike: ‘There may be circumstances under which a walk of several miles, so far from being matter of inconvenience, would be just the contrary. All that depends on the actual facts of each individual case’.

97. Farley, above n 6, at [15] per Lord Steyn, at [35] per Lord Clyde, and at [85] per Lord Scott of Foscote.

98. Ibid, at [85].

99. Above n 9.

100. (1856) 1 H & N 408.

101. Above n 9, at 122.

102. See, eg, Beale, H (ed) Chitty on Contracts (London: Sweet & Maxwell, 2004)Google Scholar para 26-073, and

103. [1969] EGD 535.

104. Above n 6, at [85].

105. Ibid, at [30] and [35] respectively.

106. Ibid, at [35] per Lord Clyde. On the mere ‘hope’ of performance, see, generally, Attorney-General v Blake [2001] 1 AC 268.

107. In Farley, Lord Scott of Foscote felt the need to emphasise the remoteness requirement (ibid, at [84]), which had not been made explicit in the formulation of the second exception by Bingham LJ in Watts.

108. In Farley, Lord Scott of Foscote, at [101], comes close to accepting such a proposition.

109. Cf Burton v Pinkerton (1867) LR 2 Ex 340.

110. Above n 9, at 120 (emphasis added).

111. [1950] 2 All ER 1167.

112. See also Collard v Saunders [1971] CLY 11161.

113. Above n 78.

114. Above n 111, at 1171–1172. Barry J concluded: ‘I consider Hobbs’ case… and Burton v Pinkerton… clearly establish that in a proper case damages for personal inconvenience may be recoverable in an action of this kind’ (emphasis added). See also Piper v Daybell Court-Cooper & Co [1969] EGD 535 and Buckley v Lane Herdman & Co [1977] CLY 3143.

115. [1972] EGD 744.

116. (1984) 15 HLR 63. See also Calabar Properties Ltd v Stitcher [1984] 1 WLR 287.

117. See also Stedman v Swan’s Tours, above n 32.

118. In relation to pecuniary losses, the Court of Appeal in Watts, above n 5 (following Philips v Ward [1956] 1 All ER 874 and Perry v Sidney Phillips & Son [1982] 1 WLR 1297) refused to use the cost of cure measure as it ‘would put the plaintiff in the position of recovering damages for breach of warranty that the condition of the house was correctly described by the surveyor and, in the ordinary case as here, no such warranty has been given’: at 1435 per Ralph Gibson LJ. We would suggest that this can be viewed in terms of assumed responsibilities, thereby avoiding the theoretical difficulty, noted by Hicks J in Bigg v Howard, Son & Gooch [1990] 12 EG 111, of awarding damages for ‘physical inconvenience’ in addition to damages in respect of an excess purchase price.

119. See Philips v Ward, above n 118.

120. See Perry v Sidney Phillips, above n 8; Cross v David Martin & Mortimer [1989] 10 EG 110; Bigg v Howard, Son & Gooch [1990] 12 EG 111.

121. See Cross v David Martin & Mortimer, above n 120; Steward v Rapley [1989] 15 EG 198; Bigg v Howard, Son & Gooch, above n 120; and Watts, above n 5.

122. A fortiori, in Watts, where it was clear to the surveyor that Mr and Mrs Watts wanted a trouble-free dwelling.

123. In Watts, the trial judge quashed any suggestion that damages should be awarded in respect of any non-pecuniary losses arising out of the breakdown of the plaintiffs’ marriage. Such a stance can, undoubtedly, be justified on a number of grounds including, we would suggest, the fact that these were not losses which the defendant would have accepted liability for.

124. [1981] 1 Lloyd’s Rep 175.

125. Ibid, at 185.

126. See also Johnson v Gore Wood, above n 6.

127. For example Cockburn CJ (at 117) considered the inconvenience to have been ‘sufficiently serious’, whilst Mellor J (at 123) defined it as having been ‘real and substantial’.

128. See, eg, Piper v Daybel, Court-Cooper, above n 114.

129. Watts, above n 5, at 1445.

130. [1976] QB 585.

131. Although compare the obiter view of the Court of Appeal in Branchett v Beaney, Coster & Swale Borough, above n 6, especially at 917–918.

132. Above n 42, at 360, and followed by Lord Hutton in Farley, above n 6, at [50].

133. Above n 56, especially at 1270.

134. Above n 42, at 361B–D.

135. Ibid, at 360H; see also Lord Jauncey of Tullichettle (358E) and Lord Lloyd of Berwick (374F). Consumer surplus can be defined as the ‘excess utility or subjective value’ which the claimant expects to receive in addition to the utility associated with the market price; see Harris, Ogus and Phillips, above n 48, at 582.

136. Above n 6, at [21].

137. Ibid, at [24]. Similar reasoning was adopted by Lord Clyde at [42]–[44]. Note that Lord Browne-Wilkinson, at [32], agreed with the speeches of Lords Steyn and Scott of Foscote.

138. Ibid, at [50].

139. Ibid, at [50] but qualified at [51] by an emphasis upon the ‘holiday cases’ and the need to extend the first Watts exception so as to incorporate any ‘breach of an obligation which, whilst not the principal obligation of the contract, is nevertheless one which he has made clear to the other party is of importance to him’.

140. Ibid, at [86] (emphasis added). Lord Scott of Foscote concluded that the claimant’s loss was either the deprivation of information vital to his decision to purchase the property (at [106]), or the consequential ‘discomfort’ that he experienced (at [107]).

141. According to Lord Scott of Foscote, the facts of Ruxley demonstrated that the plaintiff had been ‘deprived of the benefit of a pool built to the depth specified in the contract’ rather than suffering any ‘vexation, anxiety or other species of mental distress’: ibid, at [80]. However, this seems to contradict Lord Lloyd of Berwick’s primary reason for awarding damages in Ruxley (‘pleasurable amenity’) and the secondary justification of ‘disappointed’ expectations.

142. A similar analysis was adopted by Lord Scott of Foscote in Rees v Darlington Memorial Hospital NHS Trust [2003] UKHL 52, [2004] AC 309.

143. See Farley, above n 6, at [82] where his Lordship amalgamated ‘intangible mental states and sensory experiences’. An alternative interpretation which places the first Watts exception in the category of ‘deprivation of benefit’, with the second Watts exception being the only recognised loss in the second category, is unsustainable in the light of his Lordship’s treatment of Stephenson LJ’s judgment in Jarvis v Swan Tours, above n 12, in which ‘frustration, annoyance, disappointment’ are clearly incorporated into the second category.

144. See ibid, at [90], [91], [94], [99] and [101], in which Lord Scott of Foscote repeatedly infers that the claimant’s expectations are only relevant to the first category, although his Lordship does at one point recognise an implied linkage between Robinson v Harman, above n 1, and Hadley v Baxendale, above n 3, that might permit the former to operate as an effective restraint upon the latter (at [75]–[76]), as we have argued throughout this paper.

145. Cf Lord Steyn, ibid, at [16], who stated categorically that damages for ‘mental distress caused by a breach of contract [are] not established by mere foreseeability’.

146. For example, if foreseeability was the litmus test, Cox v Phillips Industries, above n 70, would now be considered correctly decided, despite the subsequent Court of Appeal decision in Channon v Lindley Johnstone (A Firm) [2002] EWCA Civ 353, [2002] Lloyd’s Law Rep PN 342 at [56] per Potter LJ: ‘foreseeability alone is not the touchstone of liability for this category of damage’.

147. [1920] AC 102. See also Heywood v Wellers, above n 15, at 463–464, where Bridge LJ drew a clear distinction ‘between mental distress which is an incidental consequence… of the misconduct of litigation… and mental distress… which is the direct consequence of the… failure to obtain the very relief which it was the sole purpose of the litigation to secure’ (emphasis added).

148. For example Johnson v Unisys, above n 16, at [70] per Lord Millett: ‘the avoidance of just such non-pecuniary injury can be said to be the principal object of the contract’.

149. See Channon v Lindley Johnstone, above n 146, especially at [54] and [56].

150. See, eg, Farley, above n 6, at [107] where Lord Scott of Foscote took account of the claimant’s ‘discomfort’ in valuing the contractual benefit of which he had been deprived.

151. Lord Scott of Foscote’s analysis of the various judgments in Jarvis v Swan Tours, above n 12, reinforces this point, with Lord Denning MR apparently conflating both categories, Edmund Davies LJ focusing on the defendant’s failure to provide a ‘holiday of the contractual quality’ (ie deprivation of a benefit) and Stephenson LJ identifying contracts where disappointment was a contemplated consequence of the breach (ie a remoteness-based approach).

152. Above n 15.

153. Watts, above n 5, at 1445 (emphasis added). See Macdonald, above n 4, at 143, who suggests that ‘fruit’ refers to the product of the defendant’s promises rather than necessarily being contained within the terms themselves. If correct, this would unfortunately turn attention back to the generic object(s) of the overall contract.

154. See Farley, above n 6, at [88] where Lord Scott of Foscote rationalised the decision in Hobbs, above n 9, as follows: ‘It was reasonable in my opinion, to value that benefit, of which he had been deprived by the breach of contract, by reference to the discomfort to the family of the walk home’ (emphasis added). Subsequently, at [106]–[107], his Lordship concluded that the claimant in Farley had bought the property without ‘the advantage of being able to take into account the information to which he was contractually entitled’, but used the ‘discomfort experienced’ as the most appropriate method of valuing that deprivation.

155. Ibid, at [109]. We would respectfully question this analysis as the discomfort of continued occupation is independent of any reduction in the market value of the premises caused by the aircraft noise; see also McGregor, H McGregor on Damages (London: Sweet & Maxwell, 2003)Google Scholar para 3-026.

156. For example Wallace v Manchester City Council [1998] 3 EGLR 38 (CA), which recognised that, in compensating tenants for living in improperly repaired premises, diminution in value and physical inconvenience were different ways of articulating the same loss; see also McCoy & Co v Clark (1982) 13 HLR 87 and Brent London Borough Council v Carmel (1996) 28 HLR 203. However, in Calabar Properties Ltd v Stitcher, above n 116, and Sturolson & Co v Mauroux (1988) 20 HLR 332 the separate itemisation of diminution and inconvenience was considered appropriate.

157. See the persuasive analysis in O’Sullivan, J ‘Loss and gain at greater depth: the implications of the Ruxley decision’ in Rose, FD (ed) Failure of Contracts (Oxford: Hart Publishing, 1997) pp 14–16.Google Scholar

158. This potentially reinforces the views of Harris, Ogus and Phillips, above n 48, at 596, n 89, when emphasising the need to distinguish ‘psychic’ costs of a breach (eg disappointment) from ‘the utility value expected from performance’.

159. GW Atkins Ltd v Scott (1980) 7 Const LJ 215 at 221 (CA).