Contracts Keyed to George
C. Czarnikow, Ltd. v. Koufos
Koufos (plaintiff) contracted with the holder of shipping vessel owed by C. Czarnikow, Ltd. (Czarnikow) (litigant) to stack a freight of 3,000 tons of sugar for conveyance to the Port of Basra and after that immediately sold to vendors. The voyage took nine days longer than anticipated. When the vessel reached Basra, the market cost of sugar had dropped because of the entry of another freight of sugar. Even thoughCzarnikow knew there was a sugar market in Basra it didn't know that Koufos proposed to instantly offer the sugar upon the vessel's entry there. Thusly, rather than getting £32 10s for each ton for the sugar, Koufos was paid £31 2s for every ton. Koufos recorded suit against Czarnikow for breach of the agreement and looked for the distinction between the market cost and the value he got for the sugar as damages. The trial court held for Czarnikow. Koufos appealed. The court of appeals reversed and held that Koufos' misfortune because of the fall in market cost was not very remote to be recoverable as damages. Czarnikow appealed to the House of Lords.
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