Template:Loss v damages: Difference between revisions
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Quick reminder: in the law of [[contract]] “losses” and “damages are” different, though related things. | Quick reminder: in the law of [[contract]] “losses” and “damages are” different, though related things. | ||
''[[Losses]]'' are pecuniary misfortunes that you might suffer as a result of a breach of contract. They can be divided into '' | '''[[Losses]]''' are pecuniary misfortunes that you might suffer as a result of a breach of contract. They can be divided into: | ||
:“'''Direct'''” losses, that are the natural and foreseeable consequence of breach of contract. | |||
:“'''Indirect'''” or “'''consequential'''” losses, which are a more speculative nature. | |||
Note that “'''[[loss of profit]]'''” and “'''[[loss of opportunity]]'''” are not judicially recognised categories of loss: they can be either ''direct'' — for example, foregone [[interest]] on a defaulted payment — or ''indirect'' — the winnings you would have got from putting that defaulted payment on a rank outsider who came good in the 2:35 at Kempton — but if in doubt (i.e., not a natural consequence of the breach) assume they will be indirect | |||
''[[Damages]]'' are the amounts a court orders a naughty counterparty to pay to an innocent | '''[[Damages]]''' are the amounts a court orders a naughty counterparty to pay to an innocent to ''compensate'' for its loss of bargain (in a contract) or ''atone for its wrongdoing'' (in a [[tort]] or [[breach of trust]]). They may, or may not, be the same amount as the actual losses suffered: | ||
:“'''[[General damages|General]]'''” damages compensate for [[direct loss|direct losses]]. | |||
:“'''[[Special damages|Special]]'''” damages relate to [[indirect loss|indirect losses]]. They are rare in contracts, even when not specifically excluded which, in finance contracts, they usually will be. | |||
[[ | :[[Exemplary damages|“'''Punitive'''” or “'''exemplary'''”]] damages do not compenstate for loss at all, but rather punish a wrongdoer for outrageous behaviour. These are not available under English contract law but may be awarded — extremely rarely — in tort or for breach of [[trust]]. | ||
:There is also an “'''[[Account for profit]]'''”: an order to hand over profits made through the misuse of someone else’s physical or intellectual property. This remedy is ''not'' available for a simple breach of contract. | |||
{| class="wikitable" | {| class="wikitable" | ||
|+ | |+ Grievances and remedies, charted | ||
{{aligntop}} | |||
! Grievance !! Remedy || Contract || Tort || Fiduciary | |||
{{aligntop}} | |||
| [[Direct loss]] || [[Contractual damages|General damages]] || Yes || Yes ||Yes | |||
{{aligntop}} | {{aligntop}} | ||
| [[Consequential loss|Indirect/consequential loss]]|| [[Special damages]] || Usually No || Usually No||Usually No | |||
{{aligntop}} | {{aligntop}} | ||
| [[ | | [[Egregious wrongdoing]] || [[Exemplary damages|Exemplary/punitive damages]] || No|| Yes ||Possibly | ||
{{aligntop}} | {{aligntop}} | ||
| [[ | |Profiting at owner’s expense|| [[Account for profit]] ||No ||Yes || Yes | ||
{{aligntop}} | {{aligntop}} | ||
|} | |} | ||
Latest revision as of 16:57, 30 September 2023
Quick reminder: in the law of contract “losses” and “damages are” different, though related things.
Losses are pecuniary misfortunes that you might suffer as a result of a breach of contract. They can be divided into:
- “Direct” losses, that are the natural and foreseeable consequence of breach of contract.
- “Indirect” or “consequential” losses, which are a more speculative nature.
Note that “loss of profit” and “loss of opportunity” are not judicially recognised categories of loss: they can be either direct — for example, foregone interest on a defaulted payment — or indirect — the winnings you would have got from putting that defaulted payment on a rank outsider who came good in the 2:35 at Kempton — but if in doubt (i.e., not a natural consequence of the breach) assume they will be indirect
Damages are the amounts a court orders a naughty counterparty to pay to an innocent to compensate for its loss of bargain (in a contract) or atone for its wrongdoing (in a tort or breach of trust). They may, or may not, be the same amount as the actual losses suffered:
- “General” damages compensate for direct losses.
- “Special” damages relate to indirect losses. They are rare in contracts, even when not specifically excluded which, in finance contracts, they usually will be.
- “Punitive” or “exemplary” damages do not compenstate for loss at all, but rather punish a wrongdoer for outrageous behaviour. These are not available under English contract law but may be awarded — extremely rarely — in tort or for breach of trust.
- There is also an “Account for profit”: an order to hand over profits made through the misuse of someone else’s physical or intellectual property. This remedy is not available for a simple breach of contract.
| Grievance | Remedy | Contract | Tort | Fiduciary |
|---|---|---|---|---|
| Direct loss | General damages | Yes | Yes | Yes |
| Indirect/consequential loss | Special damages | Usually No | Usually No | Usually No |
| Egregious wrongdoing | Exemplary/punitive damages | No | Yes | Possibly |
| Profiting at owner’s expense | Account for profit | No | Yes | Yes |