 It was contrary to the principle in "Victoria Laundry (Windsor) v Newman Industries" to think that Transfield was going to be liable for any loss, however enormous when it had no knowledge or control over what contract Mercator might be making next.To work out what is "in the parties contemplation" and what is not, Lord Hoffmann said, 
"the only rational basis for the distinction is that it reflects what would have been reasonable and have been regarded by the contracting party as significant for the purposes of the risk he was undertaking.