Clark v Macourt: Defective sperm and performance substitutes in the high court of Australia

Abstract

In Clark v Macourt the High Court was required to determine the correct basis for quantifying the sum to which the innocent buyer of a fertility clinic sold by deed was entitled after the seller provided defective donor sperm as part of the assets of that business. In the unusual factual circumstances that arose, the Court's majority awarded the buyer the full cost of replacing the defective sperm at the date of breach even though this award left her in a significantly better financial position than she would have been in had the breach not occurred. This case note provides a qualified defence of this decision. A distinction between substitutionary and compensatory contractual money awards is proposed and certain implications of recognising this distinction, particularly in regard to the so-called 'avoided loss rule of mitigation', are outlined.