Business Law
Introduction
Damages are the award payable in form of money to the person the aggrieved person as compensation for loss or injuries suffered. Damages are calculated based on the type of claim presented and the jurisdiction. Rules for the claims of damages for the breach of contract are different from those of a claim in tort.
Under common law, damages are divided into two groups’ i.e. compensatory damages and punitive damages. Compensatory damages include special damages, economic losses for instance loss of earnings, medical expenses, property and general damages. Others like pain, suffering depression and emotional distress are non economic. Compensatory damages which are referred to as actual damages are normally paid to compensate for injuries or harm suffered by the claimant. (Adams, Brownsword, 1999)
Quantum (measure) of damages for the breach of contract duty by a defendant, a court will award a total sum that would restore substantially the injured party to the last economic position they expected from the overall performance of the promise known as the expectation measure. Parties may decide before the contract, the liquidated damages payable upon breach by either parties by inserting a clause to that effect even though a court can ignore them in cases where they are meant to be punitive i.e. when they are termed as penal damages. (Fuller and Eisenberg, 2006). The court will uphold them only if they are in good faith and are genuine in an attempt to quantify a loss in advance.
General damages compensate the claimant for specific harm suffered which are non monetary in nature for instance pain, depression, suffering and loss of amenity i.e. emotional pain, disfigurement, impairment, loss of companionship among others. They are not only non quantifiable but also largely depend on the circumstance of each claimant. Some judges in UK base awards on the basis of previous judgements. General damages are awarded only in specific claims brought by individuals, after suffering personal harm i.e. personal injury. (Nadine, 2009)
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