Proving damages in contract law

Proving damages in contract law

Proving damages in contract law

Despite the fact that someone may have caused you damage as a result of their actions in relation to a contract, it may not be the case that you can claim damages from them if you're unable to prove the losses that you have sustained as a result of their actions. Where a plaintiff claims to have suffered loss or damage by reason of the defendants breach, the onus of proving the extent of loss or damage rests on the plaintiff it must be established: that the loss or damage was caused by the defendants breach and that the loss or damage was not too remote.

The distinction is drawn in this case between nominal damages and substantial damages. The former is awarded where, for one reason or another, the plaintiff proves no more than the defendants breach. For example, in Luna Park (NSW) Ltd v Tramways Advertising Pty Limited a breach of condition was proven by Luna Park, but because no evidence of loss or damage occasioned by the breach was produced only a nominal sum was awarded under the cross claim against Tramways. The case illustrates the point that a nominal sum is awarded to indicate the infraction of illegal right. On the other hand, are plenty who proves quantifiable loss or damage will not be restricted to a nominal sum and in this sense is entitled to recover substantial sum. However, until the loss of damages actually quantified the plaintiffs damages are large and the word a substantial does not signify that the large sum is always awarded.

Generally speaking, in actions for breach of contract, the court will identify the plaintiff's loss or damage by reference to the position of the plaintiff following the defendants breach. Thus, the plaintiff must establish what has been lost, not what the defendant has saved or gained as a result the breach. For example, if a buyer ofgoods establishes a breach by non-delivery, but the market price of goods of the type which the seller agreed to deliver has fallen, the buyer is, primer facie, limited to the recovery of transaction costs because of I can go into the market and purchase equivalent goods for a lower price.

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