Monetary compensation for breach of contract

I hire you and your boat to deliver a cargo of tin to be delivered to Singapore for me to sell there starting on a specified date. Because of the cheap crappy GPS device for your boat, you coulnd’t find Singapore and the cargo arrived weeks later than we agreed. By then the price of tin falls.

For this post, reference were made to the Contracts Act 1950, Principles of the Law of Contract, and the landmark case Hadley v Baxendale.

Also, RA had an overloaded weekend with many posts. If you missed it, click here more the post on fashion, style and sorts by Miss Not Ascertainable.

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When loss or injury is suffered in a breach of contract, the party that got screwed, has a right to claim monetary compensation as damages.

Provided that, the breach is caused by the other party (the screwer), and not someone else. The idea of monetary compensation is to place the party in as good a position as he would have been, had the contract went well.

Illustration (e) of Section 74 from the Contracts Act, somewhat reads,

I hire you and your boat to deliver a cargo of tin to be delivered to Singapore for me to sell there starting on a specified date. Because of the cheap crappy GPS device for your boat, you couldn’t find Singapore and the cargo arrived weeks later than we agreed. By then the price of tin falls. You must pay me (monetary compensation @ damages), according to the difference in price that I’ve loss because of the delay in delivery.

Note that not all losses suffered will be recovered. It must not be too remote.

For example, if I needed to sell the cargo of tin, on that specified date because there’s also a discount for me to buy a shotgun. But as a result of your late delivery, I don’t have enough money then to buy it on sale, and now that shotgun is now also expensive, I cannot claim the difference in price for that shotgun. That is not considered damages because it is too remote.

Which sucks because I was meant to shoot your boat with that weapon.

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*The writer is a law graduate who failed Contract Law (Part 2) once. He writes for RA almost every Monday.

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