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C. Czarnikow, Ltd. v. Koufos

House of Lords
2 Lloyd’s Rep. 457 (1967)


Facts

Koufos (plaintiff) chartered a container shipping vessel owed by C. Czarnikow, Ltd. (Czarnikow) (defendant) to load a cargo of 3,000 tons of sugar for delivery to the Port of Basra and then promptly sold to merchants. The voyage took nine days longer than expected. By the time the vessel reached Basra the market price of sugar had dropped due to the arrival of another cargo of sugar. Although Czarnikow knew there was a sugar market in Basra it was not aware that Koufos intended to immediately sell the sugar upon the vessel’s arrival there. Consequently, instead of receiving £32 10s per ton for the sugar, Koufos was paid £31 2s per ton. Koufos filed suit against Czarnikow for breach of contract and sought the difference between the market price and the price he received for the sugar as damages. The trial court held in favor of Czarnikow. Koufos appealed. The court of appeal reversed and held that Koufos’ loss due to the fall in market price was not too remote to be recoverable as damages. Czarnikow appealed to the House of Lords.

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Issue

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Holding and Reasoning (Reid, L.)

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Concurrence (Upjohn, L.)

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Concurrence (Morris, L.)

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Concurrence (Pearce, L.)

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