A breaching party will be liable for those damages which were reasonably foreseeable. Reason to foresee damages will exist where the damages occur in the ordinary, natural course of the typical breach (ordinary damages). Reason to foresee will also arise where the damages do not ordinarily and naturally occur, provided that the breaching party had notice, at the time of contracting, of the special circumstances which made such unusual damages probable in the event of a breach (special damages).
Plaintiff shipper delivered posters to defendant freight forwarder for delivery to a customer. Defendant did not deliver the posters for a month. Plaintiff contended that delivery should have been made in four days. Plaintiff filed a diversity action against defendant to recover damages for the alleged late delivery. Both parties sought summary judgment on plaintiff's sole remaining claim that defendant's late delivery caused a total loss in value of the shipment. The district court denied plaintiff's motion for summary judgment and granted defendant's motion for summary judgment. The complaint was dismissed with prejudice.
Could plaintiff shipper recover damages for defendant freight forwarder’s late delivery of goods?
From the undisputed facts, plaintiff shipper's claim was one for special damages, and was not recoverable as a matter of law. Plaintiff's sole remedy for the breach of contract embodied in the bill of lading was that provided by the Carmack Amendment to the Interstate Commerce Act, 49 U.S.C.S. § 11707, which incorporated the existing common law rules of contract damages. Plaintiff's claim that the late delivery resulted in a total loss of value of the posters could not be considered ordinary. There was no evidence that defendant freight forwarder had notice of special circumstances so as to entitle plaintiff to special damages.