Anglia Television Ltd v Reed [1972]
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Anglia Television Ltd v Reed [1972] 1 QB 60 is an English contract law case that dealt with the question of reliance damages for losses flowing from a breach of contract.
Anglia TV hired Reed for the main part in the production of a TV show. Reed repudiated the contract, and Anglia TV accepted the repudiation as termination. Anglia TV then claimed for wasted expenses incurred both before and after the contract was made, including directors' fees.
Lord Denning MR held that expenditure incurred before the breach could be claimed as long as it was within the contemplation of the parties at the time of entering into the contract. In this case, Reed (the defendant) would have known that considerable expense would be incurred.
Lord Denning MR emphasised that if the defendant had never entered into the contract, he would not be liable for the expenditure, and the plaintiff would have incurred the expenses without redress. However, once the defendant made the contract and then breached it, he could not escape liability for the wasted expenditure resulting from the breach.
As a result, Lord Denning MR awarded not just the amount spent after the breach (£854.65) but the full amount of £2750 for all the directors, designers, stage managers, and assistant managers' fees, including the expenses incurred before the breach.
Lord Denning MR sought to establish a principle that the reliance interest could be an alternative measure of damages in contract law to the expectation interest. However, it is worth noting that this principle was later rejected in cases such as The Mamola Challenger [2010].
The decision reflected the principle that when a party breaches a contract, they are liable for the foreseeable losses and expenses incurred by the other party as a result of the breach, even if those expenses were incurred before the actual breach occurred.
Anglia TV hired Reed for the main part in the production of a TV show. Reed repudiated the contract, and Anglia TV accepted the repudiation as termination. Anglia TV then claimed for wasted expenses incurred both before and after the contract was made, including directors' fees.
Lord Denning MR held that expenditure incurred before the breach could be claimed as long as it was within the contemplation of the parties at the time of entering into the contract. In this case, Reed (the defendant) would have known that considerable expense would be incurred.
Lord Denning MR emphasised that if the defendant had never entered into the contract, he would not be liable for the expenditure, and the plaintiff would have incurred the expenses without redress. However, once the defendant made the contract and then breached it, he could not escape liability for the wasted expenditure resulting from the breach.
As a result, Lord Denning MR awarded not just the amount spent after the breach (£854.65) but the full amount of £2750 for all the directors, designers, stage managers, and assistant managers' fees, including the expenses incurred before the breach.
Lord Denning MR sought to establish a principle that the reliance interest could be an alternative measure of damages in contract law to the expectation interest. However, it is worth noting that this principle was later rejected in cases such as The Mamola Challenger [2010].
The decision reflected the principle that when a party breaches a contract, they are liable for the foreseeable losses and expenses incurred by the other party as a result of the breach, even if those expenses were incurred before the actual breach occurred.
