PERFORMANCE WARRANTIES AND THE ASSESSMENT OF DAMAGES

Filobake Ltd v Rondo Ltd [2005] EWCA Civ 563; [2005] All ER (D) 141 (May)

In Filobake Ltd v Rondo Ltd [2005] EWCA Civ 563; [2005] All ER (D) 141 (May) the Court of Appeal examined the scope of a performance warranty given by the defendant supplier. The Court of Appeal rejected the narrow approach to the interpretation of the warranty which had been adopted by Judge Richard Seymour QC at first instance but nevertheless concluded he had been entitled to conclude that, on the facts, the defendants were not in breach of the warranty which they had given. Of more interest, perhaps, is the conclusion of the Court of Appeal on the assessment of damages, in particular the entitlement of a claimant to recover damages assessed by reference to its wasted expenditure. The Court of Appeal adopted a rather narrow view of a line of cases in which the courts have held a claimant to be entitled to recover damages assessed by reference, not to its loss of profit, but its wasted expenditure.