7.1.1 Damages Lecture – Introduction
Welcome to the seventh topic in this module guide – Damages! There are a wide variety of remedies available under English law, the most common and sought-after being damages. Generally, damages are a sum of money afforded to an innocent party in order to compensate them for a breach of a contract. Their primary purpose is to place the innocent party in the position they would have been in, had the contract been performed; in respect of this, if the court determines that damages will not properly compensate the innocent party, they may issue an award for specific performance.
There are two different types of damages: compensatory damages and non-compensatory damages.
Compensatory damages are an award of a sum of money which aims to compensate the claimant for the losses they have suffered under the contract. This need not be limited to loss from the contract itself, and may compensate the innocent party for losses relating to subsequent contracts.
Non-compensatory damages are an award of a sum of money in order to not only to compensate the claimant for his contractual losses, but also aim to compensate the claimant in relation to any bad conduct of the other party.
Goals for this section:
- To understand the six elements that should be considered in order to assess whether an innocent party may be entitled to claim damages: has the claimant suffered loss; is the loss suffered actionable; did the breach of contact cause the loss; was the type of loss reasonably foreseeable; did the claimant mitigate the loss and did the claimant contribute to the loss.
Objectives for this section:
- To be able to comprehend the two different ways in which the courts assess the amount of loss the claimant has suffered: reliance measure and expectation measure.
- To be able to appreciate the advantages of agreed damages clauses as they relate to liquidated damages clauses and penalty clauses.
- To be able to appreciate the categories the court look at in considering whether or not the loss the claimant has suffered is actionable, namely financial loss, the consumer surplus and distress.
- To be able to grasp how factual causation and legal causation applies to calculating whether the breach of contract caused the claimant’s loss.
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