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Jackson v. Royal Bank of Scotland
House of Lords
2005 UKHL 3 (2005)
James Jackson and Barrie Stewart Davies (plaintiffs), doing business as Samson Lancastrian, imported dog chews from Thailand and sold them to a company called Economy Bag (EB). Davies later died. The Royal Bank of Scotland (the Bank) (defendant) acted as an intermediary between the two companies, issuing transferable letters of credit to EB with Samson named as beneficiary each time an order for dog chews was placed by EB. By mistake, the Bank sent EB a document showing that Jackson was earning a 19 percent markup on every transaction. Although EB was aware that Jackson was making a profit, he did not know the specific percentage. Thereafter, EB terminated its business relationship with Jackson. Jackson filed suit against the Bank for breach of contract and seeking damages for the loss of the opportunity to make future profits from its agreement with EB. The trial court held in favor of Jackson and awarded damages based on the conclusion that his business relationship with EB could have continued for at least four additional years. The court of appeal affirmed, but limited damages to one year from the Bank’s breach of contract. Both parties appealed the matter to the House of Lords.
Rule of Law
Holding and Reasoning (Hope, L.)
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