The case of Robinson v Harman (1848) 1 Ex Rep 850 is a foundational decision in English contract law that established the principle governing the measure of damages in breach of contract cases. It remains one of the most cited authorities for the rule that the purpose of compensatory damages is to place the injured party, as far as money can do it, in the position they would have been in had the contract been performed. This landmark decision clarified how the courts should approach claims for loss arising from a breach and distinguished between mere reimbursement of expenses and compensation for the loss of a contractual bargain.
The judgement delivered by Parke B is particularly renowned for its precise formulation of this rule, which continues to form the basis of the modern law of contractual damages. The case arose from an agreement to grant a lease, which one party failed to honour due to lack of proper title, and it tested the limits of liability in such situations.
Facts of Robinson v Harman Case
The dispute in Robinson v Harman concerned an agreement between Mr Robinson and Mr Harman over the lease of a property situated in High Street, Croydon. By a letter dated 15 April 1846, Mr Harman agreed to grant and deliver to Mr Robinson a good and valid lease of a dwelling house and other premises for a term of twenty-one years, commencing from 29 September 1846, at a yearly rent of £110. The exact wording of the offer stated that Mr Harman was to “grant and deliver to the plaintiff a good and valid lease of a certain dwelling-house, and other hereditaments and premises mentioned in the agreement, for a term of twenty-one years… at the yearly rent of £110.”
Following this assurance, Mr Robinson, relying on Mr Harman’s representation that he was fully entitled to grant the lease, instructed his solicitor to prepare the necessary legal documents. During these preparations, the solicitor, acting prudently, enquired about the nature of Mr Harman’s title to the property. In response, Mr Harman stated that the property was his outright and that he alone possessed the authority to grant the lease. He denied that any trustees had an interest in the property.
However, it later emerged that this was not true. The property was actually held by trustees, and Mr Harman was only entitled to a moiety of the rent for the duration of his life. When Mr Harman discovered that the property was worth considerably more than the agreed rent, he refused to complete the lease, thus breaching the agreement.
As a result of this breach, Mr Robinson suffered loss. He had incurred expenses amounting to about £20 in preparing the lease and claimed that he had been deprived of significant gains and profits which would have accrued to him had the lease been completed.
Procedural History in Robinson v Harman
The case was first heard before Lord Denman CJ at the Surrey Spring Assizes. During the trial, Mr Harman argued that Mr Robinson could not recover damages for loss of bargain because he allegedly knew of Mr Harman’s incapacity to grant the lease at the time the agreement was made. Mr Harman sought to introduce evidence supporting this claim, but the trial judge ruled that such evidence was inadmissible, as it would alter the nature of the contract that had been admitted by the pleadings.
Lord Denman CJ found in favour of Mr Robinson, awarding £200, which included both court expenses and compensation for the loss arising from Mr Harman’s failure to fulfil the contract. Dissatisfied with the decision, Mr Harman appealed to the Court of Exchequer Chamber.
Legal Issue
The principal issue before the Court of Exchequer Chamber in Robinson v Harman was whether a plaintiff, in an action for breach of contract to grant a lease, could recover damages not only for expenses incurred but also for loss of the bargain, when the defendant knew at the time of contracting that he had no title to perform the agreement.
In essence, the question was whether the defendant’s inability to perform, due to lack of title, limited the measure of damages to the plaintiff’s expenses, or whether it extended to include compensation for the profits or advantages the plaintiff would have gained had the contract been duly performed.
Robinson v Harman Judgement
The Court of Exchequer Chamber dismissed Mr Harman’s appeal and upheld the judgement in favour of Mr Robinson. The Court held that when a party contracts to grant a valid lease, knowing that he lacks the power or title to do so, he is liable to pay the full measure of damages that will place the other party in the same position as if the contract had been performed.
The Court agreed that the evidence Mr Harman attempted to adduce—namely, that Mr Robinson had knowledge of his lack of title—was properly excluded. The existence of such evidence would have contradicted the express terms of the contract and was therefore inadmissible.
In determining the proper measure of damages, the Court referred to and distinguished the earlier case of Flureau v Thornhill, which had held that in contracts for the sale of real estate, the buyer could only recover expenses if the vendor failed to make a good title. The Court in Robinson v Harman held that this qualification to the common law rule did not apply where the vendor, or lessor in this case, had knowingly contracted to grant a lease without having the power to do so.
Reasoning in Robinson v Harman
Parke B, delivering the principal judgement, articulated the famous rule of law that:
“The rule of the common law is, that where a party sustains loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.”
This formulation became the cornerstone of the doctrine of expectation damages in English contract law. Parke B emphasised that Robinson v Harman did not fall within the narrow exception created by Flureau v Thornhill, where damages were limited to expenses because the seller’s failure to convey title was due to an unforeseen defect rather than bad faith or a knowing misrepresentation.
He found the case indistinguishable from Hopkins v Grazebrook, where the general rule of full compensation was restored. In both instances, the defendants had made absolute promises that they could not fulfil, and as such, they were liable to compensate the plaintiffs for the entire loss flowing from the breach.
Alderson B concurred, observing that the measure of damages should reflect the “whole damage sustained” as a result of the breach. He reiterated that Flureau v Thornhill introduced an exception to the general rule, but that exception could not apply where the defendant had contracted without any valid title or authority. Platt B agreed with this reasoning, stating that the case was indistinguishable from Hopkins v Grazebrook and therefore the general common law rule applied in full.
Conclusion
In conclusion, Robinson v Harman (1848) 1 Ex Rep 850 stands as a landmark in the law of contract damages. It reaffirmed the fundamental rule that compensation should restore the injured party to the position they would have enjoyed had the contract been fulfilled. Through the clear reasoning of Parke B, Alderson B, and Platt B, the Court of Exchequer Chamber confirmed that contractual obligations carry with them the expectation of performance, and failure to perform attracts full financial liability.
The case continues to be cited not only for its practical application in determining damages but also for its enduring statement of principle — that the purpose of contract law is to ensure that promises, once made, are backed by meaningful legal remedies when broken.