Jackson v Horizon Holidays Ltd is a landmark English contract law case that deals with the doctrine of privity and the award of damages for mental distress and disappointment caused by a breach of contract. The case arose from a dispute involving a family holiday that failed to meet the standards promised by the travel company, Horizon Holidays Ltd.
It raises important questions about whether a contracting party can recover damages not only for his own loss but also on behalf of third parties intended to benefit from the contract — in this instance, Mr Jackson’s wife and children.
Facts of Jackson v Horizon Holidays Ltd
In Jackson v Horizon Holidays Ltd, Mr Jackson entered into a contract with Horizon Holidays Ltd for a family holiday. He paid approximately £1,200 (or £1,400 according to some accounts) for the package which was to include accommodation, amenities, and dietary provisions explicitly specified by him and accepted by Horizon. The holiday was intended for Mr Jackson, his wife, and their children.
Shortly before the family’s departure, Horizon Holidays informed Mr Jackson that the originally booked hotel was no longer available. Instead, they offered an alternative hotel at a lower price of £1,200, assuring Mr Jackson that the substitute accommodation would be of equivalent quality.
Upon arrival at the alternative hotel — the Brown Beach Hotel in Ceylon (now Sri Lanka) — the Jackson family found conditions far below the promised standard. The accommodation was substandard, with a room that lacked a connecting door between Mr Jackson’s and the children’s rooms.
The children’s room was black with mildew, and there was fungus on the walls. The toilet and shower facilities were dirty and stained, and there was no bath as had been expected. The family had to share cramped sleeping arrangements for several days. Additional promised facilities such as a swimming pool, mini-golf course, beauty saloon, and hairdresser’s salon were entirely absent.
The food was also found to be distasteful, often cooked in coconut oil which gave it an unpleasant pervasive taste. The Jackson family’s discomfort was so great that they moved to a different hotel after about two weeks.
This series of failings caused the Jackson family considerable distress, vexation, inconvenience, and discomfort. Mr Jackson brought an action against Horizon Holidays Ltd for misrepresentation and breach of contract.
Legal Issues
The principal legal issue in Jackson v Horizon Holidays Ltd was whether damages for mental distress and disappointment could be recovered by Mr Jackson, not only for himself but also on behalf of his wife and children, who were not parties to the contract.
Traditionally, the doctrine of privity of contract prevents third parties who are not parties to the contract from claiming damages. Thus, the question arose whether Mr Jackson, as the contracting party, could recover damages that reflected the entire family’s loss, including the non-contracting members.
Another issue concerned the appropriate measure of damages where the contract was for a holiday or leisure service, where disappointment and distress are important consequences of the breach.
Jackson v Horizon Holidays Ltd Judgement
The Court of Appeal dismissed the appeal by Horizon Holidays Ltd and upheld the award of damages to Mr Jackson. The judgement was delivered by Lord Denning MR, with James LJ and Orr LJ concurring.
Lord Denning MR held that:
- Mr Jackson had made the contract with Horizon Holidays for a family holiday, and he was entitled to recover damages not only for breach of contract but also for the distress and discomfort caused by that breach.
- Given that Mr Jackson had booked the holiday for himself and his family, and Horizon Holidays had accepted the booking with full knowledge that it was for the family, the company should have foreseen that any breach would affect the entire family, not only Mr Jackson.
- It was a fiction to treat Mr Jackson as contracting solely for himself and to ignore the interests of his wife and children. The contract was made for the benefit of the family group as a whole.
- Consequently, Mr Jackson could recover damages that accounted for the discomfort and distress experienced by his wife and children as well as himself.
Lord Denning MR also observed that it would be absurd to expect that the children, including toddlers, be parties to the contract or that Mr Jackson was merely acting as their agent in a formal legal sense. Instead, the truth was that Mr Jackson was contracting on behalf of his family.
The damages awarded to Mr Jackson amounted to £1,100, which the court held was not excessive. This amount compensated the family’s disappointment and distress arising from the substandard accommodation and services provided by Horizon Holidays.
James LJ and Orr LJ agreed with Lord Denning MR’s reasoning and decision but did not add further commentary.
Conclusion
The decision in Jackson v Horizon Holidays Ltd represents a landmark moment in English contract law. It recognised the reality of family and social contracts where the benefit is intended for several people, not all of whom can be parties to the contract. It allowed for damages to be awarded to reflect the distress and discomfort suffered by all intended beneficiaries, not only the contracting party.
While subsequent legal developments have refined and limited the scope of the judgement, Jackson v Horizon Holidays Ltd remains a cornerstone case for understanding damages in holiday contracts and the evolution of the doctrine of privity.
