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Damages … bite size

The usual remedy for a breach of contract is damages. Damages is an award of money which aims to put the injured party in the position they would have been in if the contract had been performed.

The injured party may suffer pecuniary loss (financial loss) or non-pecuniary loss. If no actual loss has been suffered this will only be nominal damages.

Where loss has been suffered there are 3 limitations on the injured party:

  • Causation - A person will only be liable for losses caused by their breach of contract.
  • A person will only be liable for losses which are not too remote from the breach. The losses must be reasonably foreseeable.
  • Mitigation – The injured party cannot sit back and allow losses to pile up. They are under a duty to take steps to mitigate their loss. They may not be successful in recovering losses which they could have avoided.


Key cases:

Hadley v Baxendale (1854)

Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (1949)

Pilkington v Wood (1953)

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