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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, The Measure of
Last updated: 21-Jun-2015

Per Parke, B, in Robinson v Harman (1848) 1 Exch 850 at p 855:

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.

In Cory v Thames Ironworks Co [1861-73] All ER Rep 597 at p 599, Blackburn J said:

I think it all comes to this. The measure of damages when a party has not fulfilled his contract is what might be reasonably expected in the ordinary course of things to flow from the non-fulfilment of the contract, not more than that, but what might be reasonably expected to flow from the non-fulfilment of the contract in the ordinary state of things, and to be the natural consequences of it. The reason why the damages are confined to that is, I think, pretty obvious, viz., that if the damage were exceptional and un-natural damage, to be made liable for that would be hard upon the seller, because if he had known what the consequences would be he would probably have stipulated for more time or, at all events, have used greater exertions if he knew that that extreme mischief would follow from the non-fulfilment of his contract.

In YP Barley Producers Ltd. v Robertson (EC) Pty Ltd. [1927] VLR 194 per McArthur J. at pp213-4:

The true measure of damages in most, if not all, cases would be either the difference between contract price and market value at date of repudiation; or the difference between contract price and the costs to the seller of fulfilling the contract. In those cases there must always necessarily be taken into consideration on the one side, as the fundamental basis, the contract price. If, therefore it appears that- quite apart from the repudiation- the seller could never have performed the contract, and therefore could never have earned the contract price, it is clear that he cannot have suffered substantial damage by the repudiation.

As in ordinary cases, the onus would be upon the plaintiff to prove his substantial damages, and he would therefore have to satisfy the jury that, but for the repudiation, he would have earned the contract price.

According to my view, therefore, the question whether in these cases the plaintiff has to prove that he was ready and willing to perform the contract, becomes little more than academic – my opinion being (as I have indicated) that he need not prove it as an essential element of his cause of action, but that he must (at all events, in most cases) prove it in order to recover substantial damages

Per Lord Bingham in Golden Strait Corpn v Nippon Yusen Kubishika Kaisha (The Golden Victory) [2007] 2 A.C. 353 at para 10:

An injured party such as the owners may not, generally speaking, recover damages against a repudiator such as the charterers for loss which he could reasonably have avoided by taking reasonable commercial steps to mitigate his loss. Thus where, as here, there is an available market for the chartering of vessels, the injured party’s loss will be calculated on the assumption that he has, on or within a reasonable time of accepting the repudiation, taken reasonable commercial steps to obtain alternative employment for the vessel for the best consideration reasonably obtainable. This is the ordinary rule whether in fact the injured party acts in that way or, for whatever reason, does not. The actual facts are ordinarily irrelevant. The rationale of the rule is one of simple commercial fairness. The injured party owes no duty to the repudiator, but fairness requires that he should not ordinarily be permitted to rely on his own unreasonable and uncommercial conduct to increase the loss falling on the repudiator.

Lord Scott at para 36:

The contractual benefit for the loss of which the victim of the breach can seek compensation cannot escape the uncertainties of the future. If, at the time the assessment of damage takes place, there were nothing to suggest that the expected benefit of the executory contract would not, if the contract had remained on foot, have duly accrued, then the quantum of damages would be unaffected by the uncertainties that would be no more than conceptual. If there were a real possibility that an event would happen terminating the contract, or in some way reducing the contractual benefit to which the damages claimant would, if the contract had remained on foot, have become entitled, the quantum of damages might need, in order to reflect the extent of the chance that that possibility might materialise, to be reduced proportionately. The lodestar is that the damages should represent the value of the contractual benefits of which the claimant had been deprived by the breach of contract, no less but also no more.


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