Contractual damages—pecuniary losses
Produced in partnership with Zainab Hodgson and Kavidha Clare of CMS
Contractual damages—pecuniary losses

The following Dispute Resolution practice note produced in partnership with Zainab Hodgson and Kavidha Clare of CMS provides comprehensive and up to date legal information covering:

  • Contractual damages—pecuniary losses
  • Contractual damages—categories of pecuniary loss
  • Pecuniary loss—expectation-based damages
  • Pecuniary loss—reliance-based damages
  • Expectation and reliance-based damages distinguished
  • Pecuniary loss—damages for wasted expenditure and management time
  • Pecuniary loss—damages for consequential loss
  • Pecuniary loss—gains-based damages

This Practice Note considers the different categories of contractual damages that may be available for financial loss (pecuniary loss), ie expectation-based damages, reliance-based damages and gains-based damages.

For guidance on contractual damages generally, see Practice Note: Contractual damages—general principles.

For guidance on claiming damages for non-financial loss for breach of contract, see Practice Note: Contractual damages—non-pecuniary losses.

Contractual damages—categories of pecuniary loss

Recoverable damages in respect of pecuniary losses are:

  1. expectation-based damages (also known as ‘loss of bargain’ damages)

  2. reliance-based damages

  3. consequential loss damages

  4. gains-based damages

Pecuniary loss—expectation-based damages

‘Expectance-based damages’ are generally used for the calculation of damages.

These are awarded to compensate the innocent party and put them back into the same position as they would have been had the contract been satisfactorily performed and the breach had not occurred.

Per Toulson LJ in Durham Tees Valley Airport v bmibaby:

‘The cardinal principle of any assessment of damages for breach of contract is that the innocent party (the Claimant) is entitled to be put in the same position as he would have been in if the Defendant had not broken the contract. This requires a careful analysis of the contract. Subsidiary general rules have been developed for measuring damages in different types of case, although there may be a need for caution to see that they are not applied mechanistically in particular situations where to do so would defeat the cardinal

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