Jackson v Horizon Holidays [1975] 3 All ER 92

Key point

  • Lord Denning states that a party can recover for the distress of third parties he contracted to benefit, but this was rejected in later cases

Facts

  • C bought a travel package from a travel company (D) for himself, his wife and two children, for which he paid £1200
  • The judge granted C £1100 in damages including for mental distress
  • D appealed on sum of damages

Held (Court of Appeal)

  • The sum of damages is upheld
  • The majority thought that damages included loss suffered by C’s wife and children

Lord Denning MR

  • This case is analogous to cases such as a vicar making a contract for a coach trip for the church choir, a host paying for his friends at a restaurant, where the contract is made for the benefit of third persons
  • In such cases, damages recovered by the contracting party can cover the losses for distress of third-party beneficiaries
  • The sum of £1100 was right, it would have been excessive if awarded only for the damage suffered by C himself, but not when extended to his family

James LJ dissenting

  • The cost was for the mental distress of the husband only

Commentary

  • Lord Denning attacked not the privity rule itself but on the linked rule that in a contract made for a third party’s benefit, the promisee recovers damages for its own loss and not the loss of the third party
  • Jackson has not been overruled in later cases, but in Woodar v Wimpey Lord Wilberforce and Lord Keith held that it should be confined to a special set of cases