Measure of damages under English law

Damages for breach of contract is a common law remedy, available as of right.^[1] It is designed to compensate the victim for their actual loss as a result of the wrongdoer’s breach rather than to punish the wrongdoer. If no loss has been occasioned by the plaintiff, only nominal damages will be awarded.

A victim will not necessarily recover every loss which flows from the breach by the defendant. In order to recover any damages, the losses suffered by the victim must be caused by the defendant, and not be too remote. Further, the plaintiff has a duty to mitigate his losses.

Amount of damages

The amount of damages a plaintiff would recover is usually measured at the ‘loss of bargain’ basis. For example,

Causation and Contributory Negligence
Remoteness
- Timing of the assessment of damages

Duty to Mitigate

A plaintiff has a duty to mitigate damages and can not recover losses it could have avoided through reasonable efforts.

Bases of Assessment

There are three bases of assessment.

Expectation Interest/Loss of Bargain. Expectation damages include:

Benefit of bargain
Lost profit
Cost of cover

Reliance Interest - interest created based on reliance on contract or promise.
Restitutionary Interest

Damages Exceeding Loss: Extra-Compensatory Awards

Extra-compensatory damages: The most venerable type of extra-compensatory damages, long established in our common law jurisprudence, is nominal damages. Nominal damages are awarded where a legal wrong has been committed but no consequential loss has been caused. The purpose of the award is vindicatory – to mark the existence of the right in question and to mark the fact of its violation by the wrongdoer.

Source: Lord Scott

Special Classes of Damages

Other than pecuniary damages, which is the most common type of damages recovered, there are a few other recognizable types damages under English law:

Injured Feelings and Disappointment
Injured Reputation
Speculative Damages
Liquidated Damages and Penalty
Quantum Meruit
Exemplary or Punitive Damages

References

↑ Robinson v Harman (1848) 1 Exch 850 at 855 WorldLII

External links

Worldlii links to resources on the subject of damages

English contract law

Formation	Agreement Consideration Promissory Estoppel Creation of legal relations Certainty Privity

Contractual terms	Incorporation of terms Interpreting contracts Implied terms Unfair contract terms Penalties

Breach of contract	Measure of damages Remoteness Specific performance

Setting aside a contract	Capacity Iniquitous pressure Misrepresentation Mistake Frustration

Other	History

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