Direct v Indirect Loss

[Ripped-Off]

In a commercial transaction between two business, one of the business supplies the wrong goods (the wrong shade of white) which was shown on the delivery not as being the correct goods, so were checked and signed for. The difference in colour was so subtle that it was not possible to see the difference until the goods had been fitted and integrated with other goods of the same colour.

It turns out that the supplier had sent the right goods but the wrong colour, and had marked up the box and the delivery note all as the colour that had been ordered. Now that the goods are fitted the supplier is hiding behind his t&cs (he won the battle of the forms) which says they will only pay for direct loss. Is the cost of removing the goods after they had been installed and replacing them with the correct goods a direct or indirect loss?

Would this fall under the 1st or 2nd limb of Hadley v Baxendale?

[des8]

Re: Direct v Indirect Loss

IMO the supplier is liable for the costs of removal and replacement as when supplying the incorrectly coloured goods he would reasonably have been expected to anticipate that the fitter would have had to remove and refit the goods and so suffered that type of loss.


I have a friend who is a kitchen fitter, and has had this scenario (where cabinets even in the same delivery vary in shade) so often that he always checks every component before fitting!

[R0b]

Re: Direct v Indirect Loss

I agree with Des, the costs of removal and re-fitting would be a direct loss as they are losses which flow naturally from the breach. Direct losses may also include loss of profits and business. Good example of this is Mccain Foods v Eco Tec which you may wish to look at that could help your case