Damages

• Damages are an award of money to compensate a claimant who has suffered a loss or damage due to D's breach of contract

  • Always available as a remedy when a term has been broken - this can include non-performance, loss of profits or physical damage/harm
  • Court aims to put C back into the position they would have been in if the contract was completed as agreed
  • Damages cannot be rewarded if the loss is 'too remote'
• Nominal damages

  • This is awarded when there is no loss suffered - Staniforth v Lyall
  • Damages are awarded for the breach rather than the loss suffered
  • 'Wrotham Park award' from the case of Wrotham Park v Parkside Homes gives the courts instructions on how to calculate damages
  • Should only be awarded when there are issues calculating C's financial loss - Morris-Garner v One Stop
• Speculative damages

  • Cover situations which haven't happened or are difficult to quantify
  • Damages can't usually be claimed for mental distress in a commercial contract - Addis v The Gramophone
  • Damages can be awarded of a 'speculative nature' for mental distress if the entire point of the contract is for pleasure - Jackson v Horizon Holidays
  • Damages can be claimed for a loss of amenity (reduction of your ability to do something) - Ruxley Electronics v Forsyth
• Liquidated damages

  • Amount of damages to be paid is a term of the contract
  • If the amount isn't accurate, the amount must be fair
  • The party must show that the clause was to protect the parties involved and neither extortionate nor unreasonable
  • Penalties are not liquidated damages - ParkingEye v Beavis
• Compensatory Damages

  • 3 stage test is used to inform whether someone is entitled to the award of damages, not amount
  • CIF is considered to assess whether D factually caused the breach and if it was reasonably foreseeable - Monarch Steamship
  • Remoteness is where the court must consider whether the breach was too remote and therefore not foreseeable - Hadley v Baxendale (was the loss reasonable foreseeable and did D have knowledge of the loss?)
  • Mitigation of loss is where D must do what was reasonable to mitigate their loss in the circumstances - White and Carter v McGregor
• Assessing how much to award in compensatory damages

  • Quantum Meruit: Paying C for the amount of work they have done, if no amount is specified then the court will award a reasonable amount - URDC v Powell
  • Loss of Bargain: Aims to put C in the same financial position they would have peen in had the contract been performed, this looks at the difference in value between what was/should have been provided and contract/market prices - Chaplin v Hicks
  • Reliance Loss: C claims expenses occurred as a result of the contract not being performed or money spent to fulfil their obligations - Anglia v Reed