What is the ratio in The Heron II?

Damages for breach of contract are recoverable only if the loss was within the reasonable contemplation of both parties at the time the contract was made, having regard to their then knowledge.

What did the court decide in The Heron II?

The House of Lords held that the sugar merchants' losses from price falls were recoverable as the charterers reasonably contemplated such risks when contracting.

Why is The Heron II important for contract law?

It is the leading authority on remoteness of damage in contract, clarifying when consequential losses are recoverable and distinguishing the test from tort law.

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