Assessing Damages for Breach of Contract

FTI Consulting’s Karthik Balisagar and Tim Battrick authored a chapter for the fifth edition of Global Arbitration Review's "The Guide to Damages in International Arbitration" on the assessment of damages for breach of contract.

Contracting parties usually expect to obtain an economic benefit from the contracts that they enter. Where those contracts are breached, the remedy claimed often (but not always) takes the form of compensatory damages. One common measure of compensatory damages is ‘expectation damages’, which aim to put the claimant, so far as money can do it, back in the position in which it would have been had the contract been performed.

Karthik and Tim discuss some common issues that financial experts, lawyers and tribunals may need to consider when assessing compensatory damages. They discuss:

The importance of establishing causation in assessing damages;
The limit to damages based on the foreseeability principle;
The date of assessment and use of hindsight;
The period over which the loss should be assessed and the relevance of mitigation;
The implementation of the loss calculation;
Uncertainty in financial information; and
One alternative measure of loss: reliance damages.

Reproduced with permission from Law Business Research Ltd.