Damages for breach of contract
Compensatory damages are the principle remedy for breach of contract. Contractual damages traditionally
aim to compensate C for losses suffered as opposed to seeking to punish D. The aim of damages for breach
of contract is normally to protect the C’s contractual expectation and put C into the position they would
have been in if the breach hadn’t occurred. Compensation for the lost expectation may sometimes include
an award of damages to compensate for expenditure wasted as a result of the breach. The lost expectation
may be measured in terms of the difference in value between what the C expected to get and what they
actually received.
Causation + Breach + Loss + Breach must cause that loss-------> Liability for breach
Different forms of ‘remedy’ available
☁ Damages- common law remedy, unliquidated (unknown sum)
☁ Action for agreed sum (Debt) (no duty to mitigate and often get summary judgment),
liquidated figure (known sum owed that specific amount), a debt may be combined
with a claim for damages where there is additional (unknown) loss
☁ Restitutionary claims- allows for the recovery of money paid or the value of benefits
conferred on the guilty party on the basis that the guilty party shouldn’t be unjustly
enriched at the injured parties expense. Recovery of money paid- Total failure of
consideration. Quantum meruit- what the court think the case merits, the court
decides on what they think you deserve. It is unlike a damages action, which seeks to
compensate the injured party for its loss
☁ Equitable remedies (specific performance and injunctions)- specific performance
(not a common remedy) is an order which compels the party in breach to perform its
obligations. This is an equitable remedy available only at the court’s discretion, it is
usually used if damages aren’t an adequate remedy. An injunction is generally
prohibitory in the sense that it is an order preventing the breach of an obligation in
the contract.
The process to follow:
, 1) Breach (identify who had breached what)
2) Causation (the breach must have caused loss to the claimant)
3) Compensate the claimant for the loss. This involves the need to:
o Measure the loss (quantum- what court thinks you deserve)
o Determine whether all the loss is recoverable (and whether limitations on
recovery apply) (in terms of limitations, if the innocent party had contributed
to the loss (even if minor) they will have their damages reduced- contributory
negligence)
Topics:
1. The compensation principle, basis for compensation/ identifying the loss and how
lost expectation is measured
2. The limitations on the ability of a claimant to be fully compensated for lost
expectation: remoteness, mitigation, contributory negligence, recovery of damages
for disappointment and distress
Topic 1
Identify the compensation principle and the basis for compensation/identifying the loss
Identify the compensation principle – Focus on C’s actual loss it has suffered as a
result of the breach of contract. C cannot recover more than his actual loss. Damages
are restricted to nominal damages in the event that the C suffers no loss since the
aim isn’t to punish D even if they have profited from the breach.
The basis for compensation- Damages can compensate for loss in 2 ways: (1) Loss of
expectation (’expectation loss’) and (2) Wasted expenditure loss
Expectation loss Wasted expenditure loss
Damages are designed to put C into the position they Wasted expenditure loss means recovery of
would have been in had the contract been properly expenditure incurred in preparing for/performing
performed and breach not occurred the contract, this can include time, money and effort
which has now been wasted as a result of the
breach. Such damages aim to put the innocent party
into as good a position as it was in before the
contract was made. These damages have more
recently been held to be compensatory in the sense
of fulfilling expectation.
There are 2 possible measures: a) Difference in value and Wasted expenditure are to be determined on the
b) Cost of cure (cost of repair) basis of same compensation principle. What is paid
Compensatory damages are the principle remedy for breach of contract. Contractual damages traditionally
aim to compensate C for losses suffered as opposed to seeking to punish D. The aim of damages for breach
of contract is normally to protect the C’s contractual expectation and put C into the position they would
have been in if the breach hadn’t occurred. Compensation for the lost expectation may sometimes include
an award of damages to compensate for expenditure wasted as a result of the breach. The lost expectation
may be measured in terms of the difference in value between what the C expected to get and what they
actually received.
Causation + Breach + Loss + Breach must cause that loss-------> Liability for breach
Different forms of ‘remedy’ available
☁ Damages- common law remedy, unliquidated (unknown sum)
☁ Action for agreed sum (Debt) (no duty to mitigate and often get summary judgment),
liquidated figure (known sum owed that specific amount), a debt may be combined
with a claim for damages where there is additional (unknown) loss
☁ Restitutionary claims- allows for the recovery of money paid or the value of benefits
conferred on the guilty party on the basis that the guilty party shouldn’t be unjustly
enriched at the injured parties expense. Recovery of money paid- Total failure of
consideration. Quantum meruit- what the court think the case merits, the court
decides on what they think you deserve. It is unlike a damages action, which seeks to
compensate the injured party for its loss
☁ Equitable remedies (specific performance and injunctions)- specific performance
(not a common remedy) is an order which compels the party in breach to perform its
obligations. This is an equitable remedy available only at the court’s discretion, it is
usually used if damages aren’t an adequate remedy. An injunction is generally
prohibitory in the sense that it is an order preventing the breach of an obligation in
the contract.
The process to follow:
, 1) Breach (identify who had breached what)
2) Causation (the breach must have caused loss to the claimant)
3) Compensate the claimant for the loss. This involves the need to:
o Measure the loss (quantum- what court thinks you deserve)
o Determine whether all the loss is recoverable (and whether limitations on
recovery apply) (in terms of limitations, if the innocent party had contributed
to the loss (even if minor) they will have their damages reduced- contributory
negligence)
Topics:
1. The compensation principle, basis for compensation/ identifying the loss and how
lost expectation is measured
2. The limitations on the ability of a claimant to be fully compensated for lost
expectation: remoteness, mitigation, contributory negligence, recovery of damages
for disappointment and distress
Topic 1
Identify the compensation principle and the basis for compensation/identifying the loss
Identify the compensation principle – Focus on C’s actual loss it has suffered as a
result of the breach of contract. C cannot recover more than his actual loss. Damages
are restricted to nominal damages in the event that the C suffers no loss since the
aim isn’t to punish D even if they have profited from the breach.
The basis for compensation- Damages can compensate for loss in 2 ways: (1) Loss of
expectation (’expectation loss’) and (2) Wasted expenditure loss
Expectation loss Wasted expenditure loss
Damages are designed to put C into the position they Wasted expenditure loss means recovery of
would have been in had the contract been properly expenditure incurred in preparing for/performing
performed and breach not occurred the contract, this can include time, money and effort
which has now been wasted as a result of the
breach. Such damages aim to put the innocent party
into as good a position as it was in before the
contract was made. These damages have more
recently been held to be compensatory in the sense
of fulfilling expectation.
There are 2 possible measures: a) Difference in value and Wasted expenditure are to be determined on the
b) Cost of cure (cost of repair) basis of same compensation principle. What is paid
