This post has been contributed by Professor Roger Halson, Module Convenor for Contract law.
As summer approaches (at least in the Northern hemisphere) many people start to think about holidays. What do we anticipate when we book a holiday? We expect to have a ‘good time’, in other words we expect to be made happy. The law of contract follows this lead and treats a holiday contract as a contract for the provision of happiness. When through any unexcused cause (here called ‘happenstance’ to maintain the alliteration in the title!) a substandard holiday experience is delivered the holidaymaker will sue for breach of contract. In this blog I will examine when these damages are awarded and how they are calculated.
The contractual measure of damages seeks, so far as an award of money can, to put the claimant in the position she would have been in if the contract had been performed. If the contract had been performed the holidaymaker expected a happy experience and so, when this is not delivered will sue for damages for her disappointed expectations, often called damages for disappointment. A key feature here is that these are damages for a non-pecuniary loss. Indeed, holiday contracts are one of the most common examples when damages for breach of contract include compensation for non-financial losses.
- Jarvis v Swan Tours (1973) – A solicitor booked a two week skiing holiday and houseparty in Morlialp ‘a most wonderful little resort… a wonderland of sun, snow and ice. Unfortunately he was the only guest at the party and no suitable skis were available! Mr Jarvis recovered damages of £125.
- Milner v Carnival (2010) – A couple booked the cruise of a lifetime – a 106 day round the world cruise on the maiden voyage of the Queen Victoria. They were to receive ‘a legendary experience’ and ‘star treatment’. Sadly, reality lacked behind the brochure’s promises. The luxury outside cabin they occupied leaked and creaked. The alternative offered was smaller and had no windows. The couple left the voyage early. In their action for breach of contract they recovered damages of £8500 for their disappointment.
It is instructive to compare these two cases to see how the law in this area has developed. In particular we should note:
- Jarvis v Swan Tours established the routine availability of damages for non-pecuniary loss in so called ‘holiday cases’.
- Initially such damages were only available where the provision of happiness was the sole object of the contract. Now following the House of Lords decision in Farley v Skinner (2001) it is sufficient it was an important, though not necessarily the only, object of the contract.
- The damages awarded in Jarvis v Swan Tours were modest and were about twice the contract price. This has become a rough norm for the award of damages in ‘ordinary’ cases.
- In exceptional cases, such as Miller v Carnival, these awards can be substantial.
The award of non-pecuniary damages for breach of contract is unusual and confined to specific categories of contracts. Contracts for the provision of a holiday are examples of one category of recovery, generally described as contracts for the provision of happiness. Such damages have also been awarded for breach of contracts to provide legal, burial and dental services. Yet no one would describe a contract with a solicitor, undertaker or dentist as a contract for the provision of happiness! Rather these are contracts, like the contract with a surveyor in Farley v Skinne,r for the provision of peace of mind. This is another category of contracts for which non-pecuniary damages are available. The link to the first category is not obvious but is best expressed in this way: a holiday contract is a contract for the provision of happiness or pleasure, a contract with a solicitor/dentist/undertaker or surveyor for is a contract for the avoidance of unhappiness or displeasure.
I very much hope that you enjoy your holidays this year and do not have to rely upon the law we have just discussed.