East v Maurer
Court of Appeal
Citations: [1991] 1 WLR 461; [1991] 2 All ER 733; [1991] CLY 1306.
Facts
The defendant was an experienced hairdresser who ran two salons in neighbouring areas. The claimant bought one of these salons. During the negotiations, the defendant falsely represented that he did not intend to work at the other salon. In fact, he continued to work at the other salon and as a result the claimant was unable to make the business profitable. The claimant sued the defendant for deceit.
Issue(s)
- What damages was the claimant entitled to?
Decision
The Court of Appeal held that the claimant was entitled to their actual losses as well as loss of reasonably anticipated profits. The starting point for assessing lost profit was the expected profit the claimant might have made if they had bought another hairdressing business for a similar sum.
This Case is Authority For…
Damages for deceit compensate the claimant for all the losses they have suffered. This includes actual losses and loss of profit which might have reasonably been anticipated.
This measure is distinct from the measure of damages for breach of contract. Damages for breach of contract aim to put the claimant in the position they would be in if the contract were properly performed. Unforeseeable damages are generally not recoverable in contract, while deceit is not as limited.
