Anglia Television Ltd v Reed
Court of Appeal
Citations: [1972] 1 QB 60; [1971] 3 WLR 528; [1971] 3 All ER 690; (1971) 115 SJ 723; [1971] CLY 1735.
Facts
The defendant was a famous actor. The claimant was a production company. The claimant contracted the defendant to play the lead in an upcoming play. Before entering into the contract, the claimant had already incurred costs connected to the play, such as hiring a director. The defendant later wrongfully repudiated the contract, which forced the claimant to abandon the play.
The claimant sued for breach of contract, trying to recover damages for wasted expenditure on the play. The defendant admitted that they were liable for wasted expenditure incurred after the contract was entered into. However, they argued that they were not liable for any expenditure the claimant incurred prior to making the contract.
Issue(s)
- Is wasted pre-contract expenditure a recoverable head of damages in a breach of contract action?
Decision
The Court of Appeal held in favour of the claimant. The defendant had to have known at the time of contracting that the claimant had already spent money preparing the play, and that this would be wasted if he later walked away from the contract. The claimant could therefore recover damages for pre-contractual wasted expenditure.
This Case is Authority For…
A claimant suing for breach of contract may recover damages for expenditure wasted prior to contracting if it was reasonably in the parties’ contemplation that it would be wasted if there was a breach of contract.
Other
The court confirmed that the wasted expenditure head of damages is an alternative to the expectation measure of damages. It is not possible to claim, for example, wasted expenditure and lost profits.
