Farley v Skinner [2001]

Farley v Skinner [2001] UKHL 49 is a significant English contract law case that deals with the measure and availability of damages for distress.

Mr Farley purchased Riverside House, an estate in Blackboys, Sussex, and hired Mr Skinner to survey the property, specifically to assess the levels of aircraft noise. Skinner reported that the noise was acceptable, but after the purchase, Mr Farley discovered that the noise was intolerable, particularly at 6 am due to holding patterns formed above the house.

The trial judge acknowledged that Mr Farley had not incurred a financial loss, as he paid no more than someone aware of the noise. However, the judge awarded £10,000 for distress and discomfort suffered by Mr Farley. The Court of Appeal challenged this ruling, asserting that damages could only be awarded for physical discomfort and that mere inconvenience was insufficient.

However, the House of Lords reinstated the trial judge's award, emphasising the importance of not being inconvenienced as a significant contractual term. Lord Scott noted that had Mr Farley been aware of the aircraft noise, he would not have purchased the property. The claim could be framed as being deprived of the contractual benefit or as consequential loss on breach of contract. Lord Scott added that if there had been an appreciable reduction in the property's market value, double recovery would not be allowed.

Lord Scott also clarified that damages for inconvenience or discomfort arising from a sensory experience (sight, touch, hearing, smell, taste) could be recovered, subject to remoteness rules. However, damages were not recoverable for mere disappointment resulting from the breach of a contractual obligation, even if the disappointment led to a complete mental breakdown.

Lord Clyde mentioned the departure of this case from an ordinary surveyor's contract and highlighted the specific provision regarding the peacefulness of the property in relation to aircraft noise. The case departed from the predominant object test, emphasising that it was sufficient for both parties to know that the broken term was important, regardless of whether the contract's purpose was to provide peace of mind. Consequently, surveyors would not ordinarily be liable for distress caused by a defective house, unless there is a known and important term related to the specific issue, such as aircraft noise in this case.
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