Template:Loss v damages: Difference between revisions

'''[[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|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.

|+ Grievances and remedies, charted

! Grievance !! Remedy || Contract || Tort || Fiduciary

| [[Direct loss]] || [[Contractual damages|General damages]] || Yes || Yes ||Yes

| [[Consequential loss|Indirect/consequential loss]]|| [[Special damages]] || Usually No || Usually No||Usually No

| [[Egregious wrongdoing]] || [[Exemplary damages|Exemplary/punitive damages]] || No|| Yes ||Possibly

|Profiting at owner’s expense|| [[Account for profit]] ||No ||Yes || Yes