Anglia Television Ltd v Reed
A claimant may claim wasted expenditure instead of lost profits, including expenditure incurred before the contract if it was within the parties' contemplation.
Facts
Anglia Television planned to make a television film. It incurred expenses in preparing for the film, hiring a director, a designer and a stage manager and finding locations, before it agreed with Robert Reed, an American actor, that he would play the leading role. Shortly afterwards, Mr Reed repudiated the contract because of a double booking. Anglia tried but failed to find a replacement actor, and abandoned the film. It could not show what profit, if any, the film would have made, so it claimed its wasted expenditure of £2,750, including the expenses incurred before the contract with Mr Reed.
Legal principle
The Court of Appeal held that Anglia could recover all its wasted expenditure, including the expenses incurred before the contract. Lord Denning MR said that a claimant who has suffered a breach of contract may elect to claim either its loss of profits or its wasted expenditure. Where it claims wasted expenditure, it is not limited to expenditure incurred after the contract was made, but can recover expenditure incurred before it, if that was within the contemplation of the parties as likely to be wasted if the contract was broken. Mr Reed must have known that much expenditure had already been incurred on the film and would be wasted if he did not perform.
Related cases on remedies
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- Attorney General v Blake [2001] 1 AC 268
- British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673
- Cavendish Square Holding BV v Makdessi; ParkingEye Ltd v Beavis [2015] UKSC 67, [2016] AC 1172
- Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1
- Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79
- Farley v Skinner [2001] UKHL 49, [2002] 2 AC 732
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