Damages for Breach of Contract under English Law: An Overview
In English law, a breach of contract occurs when one party fails to fulfill its obligations under a contract. This breach can result in damages being awarded to the innocent party. Damages are a monetary compensation paid to the innocent party to compensate for the loss or harm caused by the breach.
There are several types of damages that can be awarded for a breach of contract under English law. These include:
1. Expectation Damages
Expectation damages are the most common type of damages awarded for a breach of contract. They are intended to put the innocent party in the position they would have been in had the contract been performed as agreed. This means that the damages awarded will cover any losses the innocent party has suffered as a result of the breach, including any lost profits.
2. Consequential Damages
Consequential damages are a type of expectation damages that cover losses that were not directly caused by the breach, but were a consequence of it. For example, if a supplier breaches a contract by failing to deliver goods on time, the buyer may suffer losses as a result of not being able to fulfill its own obligations to its customers. These losses would be considered consequential damages.
3. Reliance Damages
Reliance damages are awarded when the innocent party has relied on the contract and has suffered losses as a result of the breach. These damages are intended to compensate the innocent party for any costs they have incurred in reliance on the contract, such as expenses incurred in preparing to perform their obligations under the contract.
4. Restitutionary Damages
Restitutionary damages are awarded when one party has received a benefit as a result of the breach, such as a payment made under the contract. The innocent party is entitled to recover this benefit as part of their damages.
It is important to note that damages are only awarded where it is proven that the breach of contract caused the loss suffered by the innocent party. Additionally, the innocent party has a duty to mitigate their losses, which means taking reasonable steps to minimize the damage caused by the breach. If the innocent party fails to mitigate their losses, the damages awarded may be reduced.
In conclusion, damages for breach of contract under English law are intended to compensate the innocent party for any losses suffered as a result of the breach. There are several types of damages that can be awarded, including expectation, consequential, reliance, and restitutionary damages. It is important to seek legal advice if you are involved in a breach of contract dispute to ensure that you receive the appropriate damages for your losses.