compensatory damages

• Purpose of damages in contract law, as per Robinson v Harman, is to put you in the position you should have been in if the contract was carried out as agreed
• Addis v Gramophone clarified that damages in contract law cover financial loss, not anxiety, distress, or injury, which are related to tort claims
• Farley v Skinner exception: in holiday cases, loss of amenity can be compensated if the purpose of the holiday contract for pleasure is not fulfilled
• Anglia Television v Reed example: wasted expenditure claim when an actor pulled out of a TV show after expenses were paid
• In the "cost of cure" principle, like in Ruxley v Forsyth, if rebuilding is unreasonable, the cost of the cure may not be the full reconstruction
• Agreed damages clauses in contracts specify an amount to be paid if the contract is broken, and the court will uphold this amount, usually found in commercial contracts
• Calculating damages involves subtracting the actual value received from the promised value in contract law
• Causation in contract law includes factual and legal causation, illustrated by Stansbie v Troman where a decorator failing to lock the door led to a burglary
• Remoteness in legal causation, per Hadley v Baxendale, limits claims to foreseeable losses; unforeseeable losses like loss of profits due to late delivery may not be compensated
• Mitigation duty in contract law requires claimants to try to keep losses down; failure to mitigate reasonably can lead to a reduction in the claim amount or even claim failure
• Wiseman v Virgin Atlantic case example: exaggerated claims for special treats after theft and breakup were not all compensable, showing the limits of damages in contract law
• Purpose of damages under Robinson v Harman: compensatory damages aim to put the innocent party in the position as if the contract had been successfully performed
• Compensatory damages mainly cover pecuniary (financial) loss
• In Addis v Gramophone, damages do not cover distress or disappointment, only pecuniary loss
• Exception in Farley v Skinner: in holiday cases, loss of amenity can be compensated if pleasure was a major object of the contract
• Wasted expenditure: claim for 'reliance loss' when costs are incurred due to someone pulling out last minute, like film crew expenses and legal costs
• In Ruxley v Forsyth, the 'cost of cure' can be claimed if reasonable; for example, a swimming pool built with incorrect dimensions couldn't claim the cost of demolish and rebuild as it was deemed unreasonable
• Agreed damages clauses: parties include a clause in the contract setting out the compensation amount if one side breaches the contract; courts usually follow this unless it's 'manifestly excessive'
• Calculating damages: start by comparing the promised value with what was actually received to determine compensatory damages
• Causation: to claim damages, it must be proven that the loss was caused by the defendant's breach of contract
• Remoteness: claimant cannot recover compensation for a loss too remote (unforeseeable); Hadley v Baxendale case is crucial in remedies
• Mitigation: claimant has a duty to minimize losses; cannot recover for losses that could have been avoided