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   Case summaries      Kpohraror v Woolwich Building Society

Kpohraror v Woolwich Building Society [1996] 4 AER 119

The claimant was a self-employed importer and exporter of goods. He held a current account with the defendant Building Society.  The claimant purchased  some goods for £4,550 from a wholesale supplier who agreed to supply hm with the goods and ship them to Nigeria for resale. He paid for the goods by cheque, however the cheque was wrongly dishonoured. The Defendants corrected their mistake a day later. The claimant brought an action for breach of contract and claimed general damages for loss of business reputation. The damages included a small allowance for loss of reputation in Nigeria. The defendants admitted the breach but disputed the claim for loss of reputation. The Master awarded £5,550. The defendant appealed contending the claimant should only have been awarded nominal damages.


The Master was entitled to award general damages. The Court of Appeal lifted the rule of no recovery for general damages for damage to financial reputation which had previously only been available in relation to tradesman.

Evans LJ in relation to the rule in Hadley v Baxendale:
"The contentions for both parties were presented as if in a straitjacket imposed by the strict application of the rule in Hadley v Baxendale so as to require the separate consideration of each of the two limbs...I would prefer to hold that the starting point for any application of Hadley v Baxendale is the extent of the shared knowledge of both parties when the contract was made.... When that is established, it may often be the case that the first and second parts of the rule overlap, or at least that it is unnecessary to draw a clear line of demarcation between them"
In relation to general damages:
"It is abundantly clear, in my judgment, that history has changed the social factors which moulded the rule in the nineteenth century. It is not only a tradesman of whom it can be said that the refusal to meet his cheque is 'so obviously injurious to [his] credit' that he should 'recover, without allegation of special damage, reasonable compensation for the injury done to his credit' (see [1920] AC 102 at 112, [1918-19] All ER Rep 1035 at 1037 per Lord Birkenhead LC). The credit rating of individuals is as important for their personal transactions, including mortgages and hire-purchase as well as banking facilities, as it is for those who are engaged in trade, and it is notorious that central registers are now kept. I would have no hesitation in holding that what is in effect a presumption of some damage arises in every case, in so far
as this is a presumption of fact."

Back to lecture outline on remedies in contract law