• In the case of Farley v Skinner [2001] UKHL 49, [2001] 3 W.L.R. 899, it was shown that damages may be rewarded where there is mental distress of pleasure which need not be the main subject matter of the contract but an important one, nevertheless. 

Facts of Farley v Skinner [2001] UKHL 49, [2001] 3 W.L.R. 899

  • With instruction from the C, the D surveyor inspected the home he was looking to purchase
  • The C wished to know where the planes from the nearby airport affected the house
  • The D reported that there was no noise issues, however upon buying and residing there the C found otherwise
  • Due to this, the C sought damages from the D for breach of contractual obligation in exercising reasonable care which included the loss of enjoyment in the property he purchased
  • The case of Watts v Morrow [1991] saw that, unless the object of the contract, one may not seek damages, relying on this the D rejected claim against him saying he should not be able to claim damages
  • On first instance, damages were awarded however the Court of Appeal allowed the D’s appeal and believed the damages should not be awarded. So, the C brought the matter to the House of Lords

Issues in Farley v Skinner [2001] UKHL 49, [2001] 3 W.L.R. 899

  • Despite not being the object of the contract, should the D be held liable for breach of contract as there was significant noise?

Held by the House of Lords

  • Appeal allowed and damages reinstated, these were awarded on the grounds of mental distress. The investigation of noise was an important matter as to why the D was employed to survey the property; therefore, it did not matter whether it was the object of the contract, an important one would suffice 

Lord Steyn

Whilst yes the case of Watts does only allow damages for financial loss suffered from a breach of contract, there were exceptions mentioned by Lord Justice Bingham in the case, as noted by Lord Steyn

  • “the two exceptions mentioned by Bingham LJ, namely where the very object of the contract is to provide pleasure (proposition (2)) and recovery for physical inconvenience caused by the breach (proposition (3)), are pertinent.” [16]

Considering the first exception, Lord Steyn said it should not be based solely on the object of the contract

  • “There is no reason in principle or policy why the scope of recovery in the exceptional category should depend on the object of the contract as ascertained from all its constituent parts. It is sufficient if a major or important object of the contract is to give pleasure, relaxation or peace of mind.” [24]

Lord Scott

Lord Scott provided a good explanation on the latter exception – ‘physical inconvenience’

  • “If the cause is no more than disappointment that the contractual obligation has been broken, damages are not recoverable even if the disappointment has led to a complete mental breakdown. But, if the cause of the inconvenience or discomfort is a sensory (sight, touch, hearing, smell etc) experience, damages can, subject to the remoteness rules, be recovered.” [85]

Applying the above to the present case, it was found that the exception applied as seen in the words of Lord Scott:

  • “the discomfort was “physical” in the sense that Bingham LJ in Watts v Morrow [1991] 1 WLR 1421, 1445 had in mind. In my opinion, the application of Watts v Morrow principles entitles Mr Farley to damages for discomfort caused by the aircraft noise” [108]

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