An explanation of the general law of damages

An explanation of the general law of damages

In relation to contract law, there are a series of legal principles that define what damages are available to persons who can show that the other party to a contract has caused damage in some way. Where a breach of contract occurs, whether by failure to perform or by anticipatory breach, the party not in breach is entitled to recover damages. The right to claim damages is implied by law. One explanation of this is the general idea that whenever the law recognises or creates a primary obligation, a secondary obligation is implied by the law if the primary obligation is breached. In the present context, the secondary obligation is to pay damages for the breach of a primary contractual obligation. The secondary obligation will be implied in the absence of a term to the contrary.

It is open to the parties to exclude, restrict or qualify the secondary obligation. However, such provisions are subject to the rules governing exclusion clauses. Similarly, although it is open to parties to quantify the secondary obligation in advance, provisions having this effect are subject to the rules on penalty clauses. More generally, any terms dealing with rights following from breach are affected by restrictions on the use of unjust or unconscionable contract terms. Although it is quite legitimate to speak of the plaintiff having a right to claim damages from a defendant in breach of contract, it is more accurate to say that following a breach of contract the plaintiff is entitled to pursue a remedy. This establishes a contrast between a claim to damages on termination of the contractby a breach or repudiation. Unlikeliness damages, which generally depend on the existence of a court order in favour of the plaintiff, a writer termination may be exercised, in most cases at least without going to court. From this technical perspective, if we describe termination as a remedy is a form of self-help remedy, where is damages is a currial one. In some cases, a breach of contract can also be considered as a tort.

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