C. Czarnikow, Ltd. v. Koufos
House of Lords
[1969] 1 A.C. 350
Koufos (plaintiff) chartered a vessel from Czarnikow (defendant) to carry sugar to Basra for prompt resale, but the voyage took nine days longer than expected, and by the time the ship arrived, the sugar market price had dropped due to another cargo's arrival, causing Koufos to receive a lower price than he otherwise would have; Czarnikow knew a sugar market existed in Basra but didn't know Koufos intended to sell immediately upon arrival. Koufos sued for the price difference as breach-of-contract damages; the trial court ruled for Czarnikow, the court of appeal reversed finding the loss not too remote, and Czarnikow appealed to the House of Lords.
Whether damages for breach of a shipping contract, arising from a market-price decline caused by delayed delivery, are recoverable as damages that could reasonably be expected to "arise naturally" from the breach, even absent the carrier's specific knowledge of the charterer's resale plans.