“Mental distress damages available where peace of mind is important contractual object.”
The House of Lords awarded £10,000 for mental distress, holding that such damages were recoverable where peace of mind was an important object of the contract.
Farley employed surveyor Skinner to survey a property he planned to buy as a country retreat. He specifically asked about aircraft noise. Skinner negligently reported no problems, but the property suffered significant noise from nearby Gatwick airport.
Whether damages for mental distress and disappointment could be awarded for breach of contract where the contract's purpose included peace of mind and enjoyment.
The Lords extended the Watts v Morrow exception, holding that mental distress damages are available in two situations: (1) where the contract's object is to provide pleasure, relaxation or peace of mind, and (2) where there is physical inconvenience caused by the breach. The key was that peace of mind was a significant part of what was contracted for.
This case significantly expanded the availability of mental distress damages in contract, creating an important exception to the Addis v Gramophone principle while maintaining appropriate limits.
Damages for mental distress can be awarded in contract where peace of mind, pleasure, or relaxation is an important object of the contract, even without physical inconvenience.
The House of Lords awarded £10,000 for mental distress caused by aircraft noise, as the surveyor had been specifically asked about this issue for a country retreat purchase.
It significantly expanded the availability of mental distress damages by creating an important exception to the general Addis v Gramophone principle while maintaining appropriate limits.
Lord Steyn emphasized that awards should be modest and that the mental distress must flow from the contractual breach, not from disappointment at losing a bargain.
OSCOLA Citation
Farley v Skinner (No 2) [2001] UKHL 49, [2002] 2 AC 732
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[2026] UKSC 1
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