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Contract: Remedies

The purpose and measure of compensatory damages

  • 3 things to know
  • Components 2 and 3

Overview

Aim of an award of damages for breach of contract, expectation measure of damages and reliance measure of damages.

What you need to know

Answer each one before you reveal it.

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Numbers

Describe the two measures of compensatory damages available for breach of contract.

Numbers

What is the aim of an award of damages for breach of contract?

Key term

What is the expectation measure of damages?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is the aim of an award of damages for breach of contract?

    Model answer

    Damages aim to put the claimant in the position that performance would have produced. Robinson v Harman (1848) states that principle.

  2. 2

    What is the expectation measure of damages?

    Model answer

    The expectation measure compensates for the value of the promised performance. The claimant recovers the benefit the contract was expected to deliver.

  3. 3

    What is the reliance measure of damages?

    Model answer

    The reliance measure compensates for expenditure wasted in preparing to perform. Anglia Television v Reed [1972] allowed recovery of costs incurred before the actor withdrew.

  4. 4

    Can a claimant choose the reliance measure to escape a bad bargain?

    Model answer

    C & P Haulage v Middleton [1983] refused wasted expenditure where the claimant would have lost money anyway. Damages must not put the claimant in a better position than performance would have done.

  5. 5

    Are damages for breach of contract punitive?

    Model answer

    Damages for breach of contract are compensatory rather than punitive. The court measures the claimant's loss and not the defendant's gain.

  6. 6

    What are nominal damages?

    Model answer

    Nominal damages are a token sum awarded where a breach caused no measurable loss. Surrey County Council v Bredero Homes [1993] awarded nominal damages for breach of a planning covenant.

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