THE NATIONAL LAW INSTITUTE

UNIVERSITY, BHOPAL

DAMAGES: THE FUNDAMENTAL

REMEDY FOR BREACH OF
CONTRACT

SUBJECT: LAW OF CONTRACTS-I

TAUGHT BY: Ms. NEHA SHARMA

(ASSISTANT PROFESSOR, NLIU BHOPAL)

SUBMITTED BY: KUSHAGRA SRIVASTAVA

2017BALLB73
 ACKNOWLEDGEMENT

I have taken efforts in this project yet it would not have been possible without the
unconditional support of many people and I am extremely thankful to all of them for the
same.
I would like to take this opportunity to express my utmost gratitude towards our teacher
Neha Sharma Ma’am for her guidance and being there to help me out whenever required.
I would also like to thank whole of the faculty and staff members of The National Law
Institute University, Bhopal for being so helpful and co-operative.
Lastly I would extend my thanks to my fellow batch-mates and seniors for helping me out at
every stage.
Without them all I would not have been able to achieve the completion of this project and I
am really blessed to have all of them by my side.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 2

 REVIEW OF LITERATURE

• Singh Avtar, Contract and Specific Relief:-

The book is extremely flow specific in its approach. It certainly helps a student
understand the basic concepts of Contracts quite easily. There are several recent and
landmark judgements which help to analyse a topic very easily and to get a deep
knowledge of the matter.

• Jain Ashok, Law of Contract:-

The content of this book is very well organized and covers our topic of Damages for
Breach of contract substantially. The other topics are also covered very decently along
with leading cases from across the world. The book is quite complete in its own and
offers a very wide scope for good understanding.

• Bangia R.K., Indian Contract Act:-

As the title suggests the content of this book lays much emphasis on the Indian
context. One can find a large number of Indian Case Laws relating to Breach of
Contract. The book raises certain questions which force us to reflect and hence get a
deeper insight of a topic.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 3

 TABLE OF CONTENTS

S. No. Topic Page

1. Introduction 5
1.1 General Damages 5
1.2 Specific Damages 6
1.3 Nominal Damages 6
1.4 Vindictive Damages 6
1.5 Liquidated Damages 7
2. Tracing Damages in Indian Contract Act 7
3. The crux of the matter 10
3.1 Remoteness of Damage 10
3.1.1 The Rule in Hadley v. Baxendale 10
3.1.2 No recovery of Special Damages when circumstances not known 11
3.1.3 Special circumstances already within the knowledge of Contract 11
breaker
3.1.4 Relationship between two rules re-examined 12
3.1.5 House of Lords restore original vitality of two rules 12
3.2 Physical injury resulting from breach 13
3.3 Damages for Negligent Survey Report 13
3.4 Liability in ordinary cases 14
3.5 Building Contracts 14
3.6 Measure of Damages 16
3.6.1 Claim for Damages is not debt. 16
3.6.2 Damages are compensatory not penal 16
3.6.3 Inconvenience caused by breach 16
4. Latest Judgements 17
5. Conclusion 19
6. Bibliography 20

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 4

 1. INTRODUCTION
Contracts bind the parties of a contract to the terms of the agreement. As such, contracts form
the basis of many business transactions and if one party breaches the agreement, the other
party can be severely injured.

In order to discourage people from breaching a contract and also to compensate the injured
party for any losses, the law provides several remedies for breach of contract: damages,
specific performance, contract recession and contract modification.

In this analysis we would restrict our research to the part relating to damages only. Damages
are an award, typically of money, to be paid to a person as compensation for a legal injury or
loss.

In law, damages are money claimed by, or ordered to be paid to, a person as compensation or
loss or injury as according to Black's Law Dictionary

Oxford dictionary defines damages as “financial compensation for loss or injury”.

To understand the basics of our topic we would refer to the following diagram:

Damages

General Specific Nominal Vindictive Liquidated

Let us have a very brief look of what all these are actually about before studying them in
detail:

1. General Damages: The loss arising out of Breach of Contract can be divided into two
parts, namely direct loss and indirect loss. If only direct loss is compensated it is
called general damages

Illustration:-
‘A’ contracted to sell and deliver ‘B’ 50 bags of rice at Rs. 1, 450 per bag, the price to
be paid at the time of delivery. The price of rice rose to Rs. 1, 500 per bag and ‘A’
refused to sell the rice. B can claim damages at the rate of Rs.50 per bag.
.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 5

2. Specific Damages: In case where indirect loss is also compensated beside loss, it is
called Specific Damages. To get Specific Damages, concerned special situation must
be communicated.

Illustration:-

A contracted with B to supply steel rails who had in his turn contracted to supply the
same to a railway company at a very high profit. At the time of entering into the
contract, B’s contract with the railway company was made clear to A. A committed a
breach of contract. B can claim not only the difference between the market price and
the contracted price on the delivery date, but will also be entitled to the profit which
he would have made and the damages which he would have to pay to the railway
company.

3. Nominal Damages: At times, on account of Breach of Contract, the other party may
not come across any loss. Though it is the situation, the other party can file a suit.
Then Court decides a very little amount of compensation. It is called Nominal
Damages. Generally these types of damages will be fixed in case of anticipatory
breach.

Illustration:-

‘A’ entered into a contract with B, a dealer for purchase of a scooter. But he failed to
purchase the scooter. However, the demand for the scooters far exceeded the supply,
and B could sell the scooter agreed to be purchased without loss of profit. B is entitled
only to nominal damages.

4. Vindictive Damages: It is otherwise known as Punitive Damages or Exemplary

Damages. Here Contract will be breached by one of the parties and the other party
comes across heavy suffering which cannot be pressured in the form of money. Then
Court decides heavy amount as compensation.

Illustration:-

A libel was committed by an author and its publisher against a distinguished naval
officer. The officer sued for damages. He was awarded £ 15, 000 compensatory and £
25, 000 exemplary damages against both defendants.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 6

 5. Liquidated Damages: It is otherwise known as Predetermined Damages. The terms
of Contract determine the amount of compensation.

Illustration:-

‘A’ agreed to purchase B’s home for $50,000. As a part of the agreement, he must put
down a deposit of $5,000. Both parties agree that if either of them does not follow the
terms of the contract, the other person gets the $5,000 deposit. If A fails to follow
through with the purchase, B gets to keep the $5,000. If B decides she does not want
to sell her home to Gerald, she must return the $5,000.

2. TRACING DAMAGES IN THE INDIAN CONTRACT ACT

Chapter VI of The Indian Contract Act, 1872 titled as “OF THE CONSEQUENCES OF
BREACH OF CONTRACT” contains s.73-75 which deals with the concerned topic.

73. Compensation for loss or damage caused by breach of contract.—When a contract has
been broken, the party who suffers by such breach is entitled to receive, from the party who
has broken the contract, compensation for any loss or damage caused to him thereby, which
naturally arose in the usual course of things from such breach, or which the parties knew,
when they made the contract, to be likely to result from the breach of it. Such compensation
is not to be given for any remote and indirect loss or damage sustained by reason of the
breach. Compensation for failure to discharge obligation resembling those created by
contract.—When an obligation resembling those created by contract has been incurred and
has not been discharged, any person injured by the failure to discharge it is entitled to receive
the same compensation from the party in default, as if such person had contracted to
discharge it and had broken his contract.

Explanation— In estimating the loss or damage arising from a breach of contract, the means
which existed of remedying the inconvenience caused by the non-performance of the contract
must be taken into account.

Illustrations:

(a) ‘A’ contracts to sell and deliver 50 maunds of saltpetre to B, at a certain price to be paid
on delivery. A breaks his promise. B is entitled to receive from A, by way of compensation,
the sum, if any, by which the contract price falls short of the price for which B might have

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 7

obtained 50 maunds of saltpetre of like quality at the time when the saltpetre ought to have
been delivered

(b) A hires B’s ship to go to Bombay, and there takes on board, on the first of January, a
cargo, which A is to provide, and to bring it to Calcutta, the freight to be paid when earned.
B’s ship does not go to Bombay, but A has opportunities of procuring suitable conveyance
for the cargo upon terms as advantageous as those on which he had chartered the ship. A
avails himself of those opportunities, but is put to trouble and expense in doing so. A is
entitled to receive compensation from B in respect of such trouble and expense

(i) A delivers to B, a common carrier, a machine, to be conveyed, without delay, to A’s mill,
informing B that his mill is stopped for want of machine. B unreasonably delays the delivery
of the machine, and A, in consequence, loses a profitable contract with the Government. A is
entitled to receive from B, by way of compensation, the average amount of profit which
would have been made by the working of the mill during the time that delivery of it was
delayed, but not the loss sustained through the loss of the Government contract

(j) A, having contracted with B to supply B with 1,000 tons of iron at 100 rupees a ton, to be
delivered at a stated time, contracts with C for the purchase of 1,000 tons of iron at 80 rupees
a ton, telling C that he does so for the purpose of performing his contract with B. C fails to
perform his contract with A, who cannot procure other iron, and B, in consequence, rescinds
the contract. C must pay to A 20,000 rupees, being the profit which A would have made by
the performance of his contract with B.

(k) A contracts with B to make and deliver to B, by a fixed day, for a specified price, a
certain piece of machinery. A does not deliver the piece of machinery, at the time specified,
and, in consequence of this, B is obliged to procure another at a higher price than that which
he was to have paid to A, and is prevented from performing a contract which B had made
with a third person at the time of his contract with A (but which had not been communicated
to A), and is compelled to make compensation for breach of that contract. A must pay to B,
by way of compensation, the difference between the contract price of the price of machinery
and the sum paid by B for another, but not the sum paid by B to the third person by way of
compensation.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 8

74. Compensation for breach of contract where penalty stipulated for.—When a contract has
been broken, if a sum is named in the contract as the amount to be paid in case of such

breach, or if the contract contains any other stipulation by way of penalty, the party
complaining the breach is entitled, whether or not actual damage or loss is proved to have
been caused thereby, to receive from the party who has broken the contract reasonable
compensation not exceeding the amount so named or, as the case may be, the penalty
stipulated for.

Explanation— A stipulation for increased interest from the date of default may be a
stipulation by way of penalty.

Exception.—When any person enters into any bail-bond, recognizance or other instrument of
the same nature, or, under the provisions of any law, or under the orders of the Central
Government or of any State Government, gives any bond for the performance of any public
duty or act in which the public are interested, he shall be liable, upon breach of the condition
of any such instrument, to pay the whole sum mentioned therein.

Explanation— A person who enters into a contract with Government does not necessarily
thereby undertake any public duty, or promise to do an act in which the public are interested.

Illustrations:

(a) A contracts with B to pay B Rs. 1,000 if he fails to pay B Rs. 500 on a given day. A fails
to pay B Rs.500 on that day. B is entitled to recover from A such compensation, not
exceeding Rs. 1,000, as the Court considers reasonable.

(b) A contracts with B that, if A practises as a surgeon within Calcutta, he will pay B Rs.
5,000. A practises as a surgeon in Calcutta. B is entitled to such compensation; not exceeding
Rs. 5,000 as the court considers reasonable.

(c) A gives a recognizance binding him in a penalty of Rs. 500 to appear in Court on a certain
day. He forfeits his recognizance. He is liable to pay the whole penalty.

(d) A gives B a bond for the repayment of Rs. 1,000 with interest at 12 per cent. at the end of
six months, with a stipulation that, in case of default, interest shall be payable at the rate of 75
per cent. from the date of default. This is a stipulation by way of penalty, and B is only
entitled to recover from A such compensation as the Court considers reasonable.

75. Party rightfully rescinding contract, entitled to compensation— A person who rightfully
rescinds a contract is entitled to compensation for any damage which he has sustained
through the non-fulfilment of the contract.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 9

 3. UNDERSTANDING THE CRUX OF THE MATTER

A contract is not a property. It is only a promise supported by some consideration upon which
either the remedy of specific performance or that of damage is available. 1 The party who is
injured by the breach of a contract may bring an action for the damages. “Damages” means
compensation in terms of money for the loss suffered by the injured party. Burden lies on the
injured party to prove his loss.2 Every action for damages raises two problems. The first is the
problem for “remoteness of damage” and the second that of “measure of damages”.

3.1 Remoteness of Damage

Every Breach of contract upsets many a settled expectations of the injured party. He may feel
the consequences for a long time and in variety of ways. A person contracts to supply to a
shopkeeper pure mustard oil, but he sends impure stuff, which is a breach. The oil is seized
by an inspector and destroyed. The shopkeeper is arrested, prosecuted and convicted. He
suffers the loss of oil, the loss of profits to be gained on selling it, the loss of social prestige
and of business reputation, not to speak of the time and money and energy wasted on defence
and mental agony and torture of prosecution.3

Thus theoretically the consequences of a breach may be endless, but there must be an end to
liability. The defendant cannot be held liable for all that follows from his breach. There must
be a limit to liability and beyond that limit the damage is said to be too remote and, therefore,
irrecoverable.4 The problem is to where to draw the line.

3.1.1 The rule in Hadley v Baxendale

A very noble attempt was made as early as (1854) in the well known case of Hadley v
Baxendale5 to solve the problem by laying down certain rules.

ALDERSON B laid down the following rule:

1
Sunrise Associates v Govt NCT of Delhi, (2006) 5 SSC 603.
2
Sudesh Prabhakar Volvoikar v Gopal Babu Savolkar, (1996) 5 Bom CR 1.
3
See Ram Kumar v Lakshmi Narayan, AIR 1947 Cal 157.
4
See judgment of ANDREWS, J in Plasgraf v Long Island R. R. Co, Court of Appeals of New York, (1928)
284 NY 339.
5
(1854) 9 Ex 340.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 10

Now we think about the proper rule in such a case as the present is this:
Where two parties have made a contract which one of them has broken, the damages which
the other party ought to receive in respect of such breach of contract should be such as may
fairly and reasonably be considered either arising naturally, i.e., according to the usual course
of things, from such breach of contract itself, or such as may reasonably be supposed to have
been in the contemplation of both parties, at the time they made the contract, as the probable
result of the breach of it.
The decision in the above case has always been taken as laying down two rules.
(i) General Damages
General damages are those which arise naturally in the usual course of things from
the breach itself. Another mode of putting this is that the defendant is liable for all
that which naturally happens in the usual course of things after the breach.
(ii) Special Damages
Special damages are those which arise on account of the unusual circumstances
affecting the plaintiff. They are not recoverable unless the special circumstances
were brought to the knowledge of the defendant so that the possibility of the
special loss was in contemplation of the parties.

3.1.2 No recovery of Special Damages when Special Circumstances not known

Lack of knowledge of special circumstances once again prevented recovery of special
damages in Horne v Midland Railway Co.6
For the same reason loss of profits was not allowed to be recovered in British Columbia Saw
Mill Co v Nettleship.7

3.1.3 Special Circumstances already within Knowledge of Contract Breaker

But in the subsequent case of Simpson v London & North Western Railway Co8 the above
suggestion was qualified to this extent that if the special circumstances are already within
knowledge of the party breaking the contract, the formality of communicating them to him
may not be necessary.

6
(1873) LR 8 CP 131.
7
(1868) LR 3 CP 499: 18 LT 604.
8
(1876) 1 QBD 274.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 11

In another case9 a fragmentiser was purchased by the plaintiff under hire-purchase agreement.
Its rotor broke down before normal life. The plaintiff had no means to replace it at cash price.
He had to arrange it again a hire-purchase price and claimed the same as damages. The
defendant contended the plaintiff had to pay hire- purchase price because of his lack of
means. This contention was rejected. The fact that in the present circumstances of economy
the business has to depend upon hire-purchase system, was held to be within the
contemplation of the parties.

3.1.4 Relationship between Two Rules Re- examined

The relationship between the rules was re-examined in Victoria Laundry (Windsor) Ltd v
Newman Industries Ltd10 LORD ASQUITH worked out a number of propositions from a
consideration of the leading authorities.
The judgment emphasised that both the rules are based upon the principles of
“forseeability”.11

This gives a “new look for Hadley v Baxendale”. Now it has been clearly so stated by
DIPLOCK LJ in C. Czarnikow Ltd v Koufos.12
“That there are not two rules formulated in Hadley v Baxendale but only two different
instances of the application of a single rule.”
To the same effect is the decision of the House of Lords in Monarch Steamship Co Ltd v
Karlshmans Oljefabriker (A/B).13

3.1.5. House of Lords Restore Original Vitality of Two Rules:

The interpretation put upon the Hadley v Baxendale principles by the Court of Appeal in the
Victoria Laundry case had virtually replaced the expression “contemplation of the parties”
with “reasonable man’s foresight” and this being the principle in law of torts also, hardly any
distinction remained between tort and contract principles relating to remoteness of damages.
But the House of Lords in their decision in the Heron II, Koufos v C. Czarnikow Ltd14 have

9
B.P. Exploration & Co v Heent, (1982) 2 QBD 925. Where the lessor knew the purpose for which the lessee
required the premises, he was held liable for the loss of that purpose during the delayed period. Jaques v Millar,
(1877) 6 Ch D 153.
10
(1949) 2 KB 528 CA: (1949) 1 All ER 997.
11
Also so observed by DEVLIN J in Biggin & Co v Permanite Ltd, (1951) 1 KB 422.
12
(1966) 2 WLR 1397, 1497; on appeal. Heron II, the Koufos v C. Czarnikow Ltd, (1969) 1 AC 350: (1967) 3
All ER 997
13
(1949) AC 196.
14
(1967) 3 All ER 686: (1969) 1 AC 350: (1967) 3 WLR 1491

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 12

restored the distinction by again laying emphasis upon the “contemplation of the parties”.
Lord HODSON also presented the same view of Hadley v Baxendale.

3.2 Physical Injury Resulting from Breach

The wisdom of the distinction between tort and contract principles, at any rate in reference to
physical injury caused by breach, has again been questioned by Lord DENNING in Parsons
v Uttley Ingham & Co.15

In the opinion of the Court of Appeals it was held that the principle of Hadley v Baxendale
should be confined to economic loss and for physical injuries the principle of forseeability
which operates in torts should apply.16

3.3 Damages for Negligent Survey Report

The applicable principles have been stated by the Court of Appeals in Watts v Morrow. The
plaintiffs purchased a country home for £177,500 in reliance on a survey prepared by the
defendant surveyor in which he stated that overall dwelling house was sound, stable and in
good condition although there were minor defects which could be dealt with as part of
ordinary ongoing maintenance repair. After taking possession the plaintiffs discovered
substantial defects not mentioned in the defendant’s report which required urgent repair,
including the renewal of the roof, windows and floor boards. The plaintiff carried out repairs
to remedy the defects at a cost of £ 33,691 and sought to recover this amount. The surveyor
admitted liability but pleaded that it should not be more than £ 15,000 being the difference
between the price paid and the price that the home was worth if the defects were taken into
account. The court held that the proper measure of damages was the diminution in value
rather than cost of repairs. Applying the principle of restitution to the terms of the contract,
the amount required to put the plaintiff in the position in which he would have been if the
surveyor had carried out the contract of survey properly was the amount by which he was
caused to pay more the value the house in its true condition.17

15
(1978) 1 All ER 525.
16
Distinction between tort and contract is breaking down at many points. See Fridman, (1977) LQR 482.
17
The court followed Philips v Ward, (1956) 1 A11 ER 874 and Perry v Sidney Philips & Son (a firm), (1982) 3
A11 ER 705

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 13

3.4 Liability in ordinary cases

The extent of liability in ordinary cases is what may be foreseen by “the hypothetical
reasonable man”, as arising naturally in the usual course of things. One illustration is the
decision of the Madras High Court in Madras Railway Co v Govinda Rau.18

Fazal Ilahi v East Indian Railway Co19 is another illustration of the same kind.

In a claim for general damages the plaintiff has to assert that he has suffered such loss but for
the purpose of claiming special damages he has specifically to plead and prove that he has
sustained such special loss.20

3.5 Building Contracts

Since works and building contracts are undertaken only with a view to earn profits, the party
committing the breach would be liable for the contractor’s loss in terms of expected profits.
The Supreme Court came to this conclusion in A.T. Brij Pal Singh v State of Gujarat.21
Some earlier cases on the subject were also decided either on the basis of cost of cure or
difference in value depending on whether in the circumstances of the case, cure would be
reasonable or whether recovery on the basis of difference in value would be reasonable. The
latter would be more reasonable where the building, though defective, is nevertheless
substantially useful. The cost of rectification even if recovered, may not be so used.22

Delay suffered by builder

The builder was required to complete the work within 18 months but by reason of delays
caused by the Department, it took 27 months to be complete. The builder suffered itemized
damages which he proved by leading oral evidence. The amount claimed being reasonable
was decreed.23

18
(1898) 21 Mad 172Damages cannot be recovered by a person who does not do his duty under the contract.
19
(1921) ILR 43 All 623.
20
Chief Secy, State of Gujarat v Kothari Associates, (2003) 1 Guj CD 372 (Guj).
21
(1948) 4 SSC 59: AIR 1984 SC 1703.
22
See East Ham B.C. v Bernard Sunley & Sons Ltd, (1965) 3 All ER 619 HL.
23
Chief Secy, State of Gujrat v Kothari Associates, (2003) 1 Guj CD 372 (Guj).

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 14

Scheme for allotment of plots

Damages for mental pain and anguish cannot be awarded in a case in which there is a breach
on the part of the development authority in delaying the completion of the scheme. It is not a
head of damages in ordinary commercial contracts. The court, however, allowed interest at
the rate of 12% on the refundable amount though there was no provision in the contract to
that effect. It was justifiable on equitable grounds. The brochure of the scheme clearly
excluded the liability of the authority to pay interest in cases of refund of consideration. It
was held that this clause would apply only to cases in which the claimant himself was
brought about the circumstances of refund.24

Loss of profit is a special loss

Thus, loss of profits which are to accrue upon resale cannot be recovered unless it is
communicated to the other party that the goods are for resale upon a special contract. This is
borne out by the decision of the Supreme Court in Karsandas H. Thacker v Saran
Engineering Co. Ltd.

24
Ghaziabad Development Authority v Union of India, (2000) 6 SCC 113.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 15

3.6 Measure of Damages
Once it is determined whether general or special damages have to be recovered they have to
be evaluated in terms of money. This is the problem of measure of damages and is governed
by some fundamental principles.

3.6.1 Claim for damages is not debt

A claim for damages arising out of breach of contract, whether for general or liquidated
damages, remains only a claim till its adjudication by the court and become a debt only after
courts award it. Till then and on the basis of the claim alone, the claimant is not entitled to
present a winding up petition of the defendant company on the ground of its inability to pay
debts.25

3.6.2 Damages are compensatory, not penal

In the words of ASQUITH J: “It is well settled that the governing purpose of damages is to
put the party whose rights have been violated in the same position, so far as money can do so,
as if his rights have been observed.”26

Robinson v Harman27 is an apt illustration of the above principle.

3.6.3 Inconvenience caused by breach

But the inconvenience caused by the breach may be taken into account. Thus, for example ,in
Hobbs v London & South-Western Rly Co, where a train pulled its passengers to a wrong
direction and consequently the plaintiff and his wife, finding no other conveyance, nor a
place to stay, had to walk home at midnight, the jury allowed £ 8 as damages for
inconvenience suffered by the plaintiffs in being obliged to walk and £ 20 in respect of the
wife’s illness caused by catching cold. On appeal, the court of Queen’s Bench held that the £
8 was properly awarded but not £ 20.

25
Greenhills Exports(P) Ltd v Coffee Board,(2001) 4 Kar LJ 158 (DB).
26
In Victoria Laundry (Windsor) Ltd v Newman Industries Ltd (1949) 2 KB 528 CA.
27
(1848) 18 LJ Ex 202.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 16

 4. LATEST JUDGEMENTS

Lea v Ward28 (06.09.2017):-

Held:

The Claimant is entitled to an award of general damages at common law. However, the
damages can only be in respect of the nuisance caused by the physical structures I have found
to amount to a substantial interference. They have only been in place since late 2015. The
degree of interference has not been significant. There is no evidence of Michael Lea or any of
his licensees having had great difficulty in using the route through the gate, rather it has been
less convenient for those coming up from Bolas Lane. In my judgment the amount of general
damages should be relatively low and I assess these at £500.00 on the basis that either the
physical structures/erections will be removed pursuant to mandatory injunction and I would
expect that to happen in very short order or Mr Ward will have provided an equally
convenient alternative route, again in very short order.

Watt v Dignan and Ors29 (05.10.2017):-

...because there is nobody maintaining the toilets, it is unlikely that a purchaser would be
interested in the unit with the toilets at all, and that there would be no premium for them.
From this he reasons that the right to use the toilets had only a nominal value. The judge did
not refer to this evidence, and said that had he done so he could only have awarded nominal
damages

Super Cassettes Industries Private Limited vs. HRCN Cable Network30 (09.10.2017):-

In my view it is desirable to drop the use of the phrase "vindictive" damages altogether,
despite its use by the county court judge in Williams v. Settle [1960] 1 W.L.R 1072, Even
when a purely punitive element is involved, vindictiveness is not a good motive for awarding
punishment. In awarding "aggravated" damages the natural indignation of the court at the

28
Lea v Ward (06.09.2017 - UKCH) : MANU/UKCH/0178/2017
29
Watt v. Dignan and Ors (05.10.2017-UKWA) : MANU/UKWA/0395/2017
30
Super Cassettes Industries Private Limited vs. HRCN Cable Network (09.10.2017 - DELHC) :
MANU/DE/3094/2017

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 17

injury inflicted on the plaintiff is a perfectly legitimate motive in making a generous rather
than a more moderate award to provide an adequate solatium. But that is because the injury to
the plaintiff is actually greater and, as the result of the conduct exciting the indignation,
demands a more generous solatium.

OTHER REFERENCES TO CASES OF 2017 RELATING TO:-

• General Damages:-

Fletcher v Keatley (12.10.2017-UKWA)

ARB v IVF Hammersmith Ltd (06.10.2017-UKWQ)

• Specific Damages:-

Ziglar v. Abbasi et al. (19.06.2017-USSC)

Sergei Boissier v. Kara Katsur (20.01.2017 - 5th Circuit )

• Nominal Damages:-

Ashok Kumar Nath v. Union of India and Ors. (23.11.2017 - CALHC )

Parker v The Chief Constable of Essex Police (18.08.2017 - UKWQ)

• Vindictive Damages/Punitive Damages:-

The State Of Kerala v. The State Of Tamil Nadu (07.11.2017 - SC Order )

Nokia Corporation and Ors. v. Movie express and Ors. ( 03.11.2017 - DELHC )

• Liquidated Damages:-

Star Engineering Contractors v. N.L.C. India Limited (21.11.2017 - MADHC )

Naval Patel and Ors.v. The State of West Bengal and Ors. (03.11.2017 - CALHC )

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 18

 5. CONCLUSION

So we started our journey by looking at the basics of damages for breach of contract by
looking at a few definitions and illustrations. We then moved towards the Indian context and
analysed the Indian Contract Act of 1872.

Our core research started from the Remoteness of Damage from where we moved on to the
case of Hadley v. Baxendale. We saw two rules being laid down and how they were
examined. As we went forward we saw many things arising out of the flow.

The topics like damages for negligent survey report and damages for building contracts that
we encountered gave us a view of the modern scenario which somewhat helps us in
answering our research question that was as follows:

“Are the damages for breach of contracts well established or is there a further scope of their
development?”

So it seems like there is certainly a scope of further development because over the years
various judgements have not only generated new concepts but also overturned prevailing
ones.

With the increase in number of cases along with the passage various complexities have arisen
and hence to counter them the evolution of this concept is indispensable.

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 19

 6. BIBLIOGRAPHY

• www.manupatrafast.in
• http://mercantilelaws.blogspot.in/2012/09/kinds-of-damages-under-
breach-of.html
• http://www.faircontracts.org/contract-provisions/liquidated-damages-
clause
• https://accountlearning.com/types-of-damages-for-breach-of-contract-
with-examples/
• https://www.legalmatch.com/law-library/article/types-of-damages-
available-for-breach-of-contract.html
• http://www.constructionlawmadeeasy.com/natureofdamages
• http://jec.unm.edu/education/online-training/contract-law-
tutorial/remedies-for-breach-of-contract
• http://www.law.nyu.edu/sites/default/files/ECM_PRO_063763.pdf

DAMAGES: THE FUNDAMENTAL REMEDY FOR BREACH OF CONTRACT 20