C. Czarnikow Ltd. v. Koufos

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Facts: Plaintiff and Defendant entered into a contract. Defendant was to do deliver sugar to Basra, Iraq. Defendant delayed in delivering sugar, which is highly susceptible to the market price. The price fell before delivery.

Issue: Should the defendant be liable for damages due to the lower price? How foreseeable was that damage

Holding: The defendant is liable.

Reasons: It is a foreseeable market condition that sugar prices would fall

  • Foreseeability:
    • Must have substantial possibility within contemplation
    • 2% chance of a circumstance occurring is not compensable -- 25% chance is