Law of Contract: Damages
General Notes
Damages are the pecuniary [monetary] recompense given by process of law to a person for the actionable wrong that another has done him. Damages may, on occasion, be awarded where the plaintiff has suffered no ascertainable damage: damage may be presumed.
Every breach of contract gives rise to a claim for damages, even when the claimant has not suffered any loss as a result of the breach, he is still entitled to recover damages, such damages are nominal damages. The legal meaning of damages is to compensate the innocent party for the breach of the contract by the guilty party. The relevant criteria for damages is the actual suffered loss of the innocent party, i.e. the innocent party shall not be better off with the damages than it would have been off if the contract would have been fulfilled properly.
The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. Robinson v Harman (1848) 1 Exch 850 per Parke B at p.855.
Thus the basic principle is that compensation for pecuniary loss naturally flowing from the breach and the damages awarded should represent no more than the value of the contractual benefits of which the claimant has been deprived. This principle is however qualified by another one, to take all reasonable steps to mitigate the loss consequent on the breach.
See also:
Damage Without Infringement of Legal Right (damnum absque injuria)
Damages, Liquidated
Damages, Measure of
Damages, Remoteness of
Damages in a Contract and in a Tort
Damages in Respect of Loss of Profits
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