Remedies and Damages
The remedial toolkit
Remedies for breach include damages, specific performance, injunction, rescission, and restitution. Damages aim to put the claimant in the position they would have been in had the contract been performed (expectation measure), or to restore them to their pre-contract position (reliance measure). The claimant must prove loss and mitigate it. Remoteness limits recovery to losses arising naturally or within the parties' contemplation at the time of contracting.
Key doctrines
- Causation: the breach must cause the loss.
- Remoteness: only foreseeable losses are recoverable.
- Mitigation: the claimant must take reasonable steps to reduce loss; failure reduces recovery.
- Liquidated damages vs penalties: a genuine pre-estimate of loss is enforceable; a penalty clause is not.
- Equitable remedies (specific performance, injunction) are discretionary and unavailable where damages are adequate.
Traps to watch
- Expectation vs reliance: choose the measure that reflects the claimant's actual loss; do not double-count.
- Non-pecuniary loss: damages for distress are generally limited to contracts whose object is to provide enjoyment or peace of mind.
- Penalty clauses: courts look at substance, not labels; a clause is penal if it is extravagant or unconscionable compared with the likely loss.
- Contributory negligence generally does not reduce damages for breach of contract unless statute allows.
Rule of thumb
Run the sequence: causation → remoteness → mitigation → measure → limits. Worked example: a supplier delivers late, causing the buyer to lose a profitable sub-sale that the supplier knew about. The loss is caused by the breach, within contemplation, and if the buyer could not reasonably mitigate, it is recoverable as damages.