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Damages

Damages are the pecuniary 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.
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Damages
Last updated: 21-Jun-2015

Robinson v Harman [1848] EngR 135; (1848) 1 Exch 850; 154 E.R. 363 per Parke B at p.855:

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.

Hadley v Baxendale (1854) 8 Ex 341 per Alderson B:

Damages are the pecuniary recompense given by process of law to a person for the actionable wrong that another has done him.

Per Lord Atkinson explained in Wertheim (Sally) v Chicoutimi Pulp Co. [1911] A.C. 301 at pages 307-8:

it is the general intention of the law that, in giving damages for breach of contract, the party complaining should, so far as it can be done by money, be placed in the same position as he would have been in if the contract had been performed: Irvine v Midland Ry. Co. (1880) 6 L. R. Ir. at p. 63, approved of by Palles C.B. in Hamilton v Magill (1883) 12 L. R. Ir. at p. 202. That is a ruling principle. It is a just principle. The rule which prescribes as a measure of damages the difference in market prices at the respective times above mentioned is merely designed to apply this principle and, , it generally secures a complete indemnity to purchaser. But it is intended to secure only an indemnity. The market value is taken because it is presumed to be the true value of the goods to the purchaser. In the case of non-delivery where the purchaser does not get the goods he purchased, it is assumed that these would be worth to him, if he had them, what they would fetch in the open market; and that, if he wanted to get others in their stead, he could obtain them in that market at that price. In such a case, the price at which the purchaser might in anticipation of delivery have resold the goods is properly treated, where no question of loss of profit arises, as an entirely irrelevant matter: Rodocanachi v Milburn (1886) 18 QBD 67.

The purchaser not having got his goods should receive by way of damages enough to enable him to buy similar goods in the open market. Similarly, when delivery of goods purchased is delayed, the goods are presumed to have been at the time they should have been delivered worth to the purchaser what he could then sell them for, or buy others like them for, in the open market, and when they are in fact delivered they are similarly presumed to be, for the same reason, worth to the purchaser what he could then sell them for in that market, but if in fact the purchaser, when he obtains possession of the goods, sells them at a price greatly in advance of the then market value, that presumption is rebutted and the real value of the goods to him is proved by the very fact of this sale to be more than market value, and the loss he sustains must be measured by that price, unless he is, against all justice, to be permitted to make a profit by the breach of contract, be compensated for a loss he never suffered, and be put, as far as money can do it, not in the same position in which he would have been if the contract had been performed, but in a much better position. The authorities cited, Wilson v Lancashire and Yorkshire Ry. Co. (1861) 9 C. B. (N.S.) 632 and Schulze & Co. v Great Eastern Ry. Co. (1887) 19 Q. B. D. 30, bear out this conclusion.


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