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Doyle v Olby (Ironmongers) Ltd [1969] 2 QB 158

Contract law – Misrepresentation – Damages – Fraud – Business Purchase – Loss – Breach of Contract – Deceit – Remoteness of Damage

Facts

The complainant, Mr Doyle, decided to purchase an Ironmonger’s business from the defendants, Olby (Ironmongers) Ltd. He purchased the business for £4,500 and the stock at £5,000. It had been detailed that the business would be ‘all over the counter’, but it turned out that half of business was through a travelling salesman. The complainant made heavy losses and although he had managed to sell the business to a third party for £3,700, he had suffered debts as a consequence.

Issues

The court had awarded Mr Doyle £1,500 for the deceit of the business sale. This figure was based on the cost of employing a part time traveller. The complainant appealed this decision to the Court of Appeal.

Held

The Court of Appeal held that the damages the complainant should receive must be increased to £5,500. Mr Doyle should be entitled to recover his losses and all damages that directly result from the deceit of buying the business. The award he had received was based on damages for breach of contract, which were different to fraudulent misrepresentation. The damages should put the complainant into the position he would have been in if there had been no false representation by the defendant in the course of the sale. The defendant cannot say they could not have reasonable foreseen this loss. Thus, this case established that damages for breach of contract are different from those of fraud and conspiracy.


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