Baltic Shipping Company v Dillon (1993) 176 CLR 344

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  • Dillon was a passenger on a cruise ship (the “Mikhail Lermontov”).  The cruise was meant to go for 14 days.
  • The cruise ship sank after only 9 days at sea.
  • Dillon sued the operators for a breach of contract and a total lack of consideration.
  • Dillon also sued for damages to her property and distress.


  • Was there a total lack of consideration by Baltic Shipping Company?
  • Could Dillon recover damages for distress?


  • There was not a total failure of consideration due to 5 of 14 days.
  • Damages can be awarded not just for physical loss.
  • Damages can be awarded where the loss undermines the point of the contract; e.g. a cruise where the point is to enjoy it.


“‘…damages for disappointment and distress are not recoverable unless they proceed from physical inconvenience caused by the breach or unless the contract is one the object of which is to provide enjoyment, relaxation or freedom from molestation.'”

(Mason CJ at page 365)

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