Breach of Contract


The remedy for breach of contract is damages. In this context, ‘damages’ mean the compensation payable for a breach of contract, by the person who breaches the contract, to the party injured by the breach. Damages, as a reflection of natural justice, should balance the losses caused by the breach.

Pursuing a claim for damages may be said to be a commercial activity. Money, time and effort are ventured in the hope of financial compensation. Before launching such an enterprise, it is as well to assess both risks and potential benefits.

Assessing Damage

Damages are assessed on the principle that they should put the injured party into the position it would have been had the breach not occurred. However, if the injured party is suffering no loss because the defective building is working as intended, it risks achieving no more than a pyrrhic victory in court. It may successfully demonstrate a breach of contract but fail to show that this has caused it (significant) loss and, as a consequence, may be awarded no more than nominal damages. Pursuing a claim for damages is a commercial activity involving investment, risk and return. Potential litigants should quantify their loss and estimate the cost of pursuing legal remedy before committing to it.