Chapter 12: Contractual Remedies
Damages (Pg. 275)
• Damages are an award of money after wrongdoing.
• Normally, the plaintiff is not entitled to receive the exact thing that it expected to get
under the contract.
• Plaintiff is only entitled to monetary value of expected benefit.
• Types of contractual damages:
o Expectation damages
o Reliance damages
o Account of profits
o Nominal damages
o Liquidated damages
o Punitive damages
Expectation Damages (Pg. 276)
• Places the plaintiff in the position that it would have been in (monetary value), if the
contract had been performed.
• Most common form of damages.
• They are described as “forward-looking”.
• They equal the value of the benefit that the plaintiff expected to receive minus the value
of the costs that it expected to incur.
Issues for Expectation Damages
• Sometimes difficult to calculate:
o Awarded even if calculation is imprecise.
o Not awarded if calculation is totally speculative.
• Difficulty in identifying expected benefit:
o Receipt of service itself cost of cure damages:
Awarded if plaintiff has legitimate interest in having the work done or if
plaintiff already spent money curing defendant's performance.
o Receipt of value of service’s end product loss of value damages:
Awarded if difference between cost of cure and benefits of cure is
• Alternative performance: calculated on the basis of the least onerous option.
• Intangible losses: will be provided, if they were in the reasonable contemplation of the
Remoteness (Pg. 280)
• Loss is not remote if either:
o Reasonable person should have known of risk of loss.
o Defendant actually knew of risk of loss. • Test applied at time of creation of contract.
• Remoteness as a rule of fairness.
Mitigation (Pg. 282)
• Plaintiff cannot recover damages that it unreasonably failed to mitigate.
• Mitigation = minimization of losses.
• Plaintiff should take all reasonable steps to mitigate.
• Costs of mitigation can be recovered.
• Effect of failure to mitigate: damages reduced to extent losses not avoided.
Business Decision 12.1 (Pg. 282) not liable for all losses. You need to mitigate your
damages. You will get the losses that you cannot reasonably mitigate ($3000) since
they could have gotten another supplier in 3 weeks. You will get paid for the time in
which you couldn’t get another supplier. You could also get money for COST of
Account of Profits (Pg. 284)
• Damages traditionally limited to losses.
• Relief now available for wrongful gains.
• Defendant placed as if breach never occurred.
• Account only in exceptional circumstances (only if legitimate reason to deprive
defendant of profit).
Nominal Damages (Pg. 285)
• Breach of contract is actionable per se:
o Wrongful even if plaintiff suffers no loss.
• Nominal damages:
o symbolize the fact that the defendant did not honour its contractual obligations to
the plaintiff, but plaintiff has not suffered any loss.
o Limited to small amount.
• Courts may assess trial costs against plaintiff for wasting court time.
Liquidated Damages (Pg. 285)
• A genuine attempt by contracting parties to estimate the value of the loss that would
result from a breach th