For a seller to be liable for profits lost on a sub-contract for the re-sale of goods, the buyer must establish that the seller assumed responsibility for such losses at the time of the main contract. In essence, the buyer will need to prove some special knowledge on the part of the seller, and that one of the following applies: The seller knew of the sub-contract at the time of the main contract with the buyer (this will be unlikely on the facts, as this will require the buyer to conclude a sub-contract prior to the conclusion of the main contract). If the buyer can establish that the seller had particular knowledge of the sub-contract and its terms, then it may recover the profit actually lost on the sub-contract. The seller knew that it was probable that the buyer would re-sell the goods, perhaps because the seller knew that it was trading with a dealer rather than an end-user. The lost profit will be calculated by reference to average trading margins in the buyer’s business, rather than the specific margin agreed on the sub-contract. The seller had contracted to sell specific goods that could not be replaced. Such goods must be so specific that it would be impossible for the buyer to replace them, for example the contract is for a quantity of goods with specified serial numbers.