Template:Loss v damages
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 and indirect, or consequential losses.
Damages are the amounts a court orders a naughty counterparty to pay to an innocent one as compensation for its loss. They may, or may not, be the same amount as the actual losses suffered.
Damages may be general, if they compensate for direct losses, or special, if they relate to indirect losses. (There are also “punitive”, or “exemplary” damages, but these are not available under English law for breach of contract.
Special damages, as compensation for indirect losses, are extremely rare in contract — when they are not ruled out explicitly which, in the world of finance, they usually are.
| Loss | Remedy |
|---|---|
| Direct loss | General damages |
| Consequential loss | Special damages |
| Egregious wrongdoing | Exemplary damages (potentially available in tort and breach of fiduciary duty; not in contract) |
| Breach of trust or misuse of property | General damages and account for profit |