The Differing Principles of Assessment of Damages in Tort and Contract
The Differing Principles of Assessment of Damages in Tort and Contract
By Raphael Kok
1. Introduction
For those in the legal fraternity, the question of whether a legal wrong has been committed in various situations predominantly occupies their concentration. This holds true, even purely in the civil context. When confronted with a problem, the question that immediately blazes in their mind is this: “Is there a breach of tortious duty or a breach of contract here?” However, the layman’s perspective is a stark contrast. He is not interested in knowing whether it is a case of breach of tortious duty, or a breach of a contractual duty, or both. He is not interested in knowing how does a tortious or contractual liability arises. Instead, he is only interested in a single thing: compensation. His mind is only focused on a single question: “How much can I get out of this?” This is why the law of damages deserves meticulous analysis in any given civil case. And why any legal practitioner, wishing to serve his clients’ interest best, must command a firm grasp of the principles of assessment of damages in tort and contract. More importantly, he must appreciate the reality that there are essential theoretical and practical differences between the two. As Scrutton L.J. noted in The “Arpad” : “It is often said that the measure of damages in contract and tort is the same; I do not think that this is strictly accurate”. Indeed, such differences affect both the question of recoverability and quantum. Conveniently, the approach in assessing damages in tort and contract are mainly identical. Thus, any differences in their principles can be analysed in parallel. Such principles can be divided into three categories i.e. (1) basis of compensation; (2) principles limiting compensatory damages; and (3) types of loss. They are by no means mutually exclusive, but instead may overlap each other. They are merely categorised as such to ease understanding to the law of damages
By Raphael Kok
1. Introduction
For those in the legal fraternity, the question of whether a legal wrong has been committed in various situations predominantly occupies their concentration. This holds true, even purely in the civil context. When confronted with a problem, the question that immediately blazes in their mind is this: “Is there a breach of tortious duty or a breach of contract here?” However, the layman’s perspective is a stark contrast. He is not interested in knowing whether it is a case of breach of tortious duty, or a breach of a contractual duty, or both. He is not interested in knowing how does a tortious or contractual liability arises. Instead, he is only interested in a single thing: compensation. His mind is only focused on a single question: “How much can I get out of this?” This is why the law of damages deserves meticulous analysis in any given civil case. And why any legal practitioner, wishing to serve his clients’ interest best, must command a firm grasp of the principles of assessment of damages in tort and contract. More importantly, he must appreciate the reality that there are essential theoretical and practical differences between the two. As Scrutton L.J. noted in The “Arpad” : “It is often said that the measure of damages in contract and tort is the same; I do not think that this is strictly accurate”. Indeed, such differences affect both the question of recoverability and quantum. Conveniently, the approach in assessing damages in tort and contract are mainly identical. Thus, any differences in their principles can be analysed in parallel. Such principles can be divided into three categories i.e. (1) basis of compensation; (2) principles limiting compensatory damages; and (3) types of loss. They are by no means mutually exclusive, but instead may overlap each other. They are merely categorised as such to ease understanding to the law of damages