Damages for a breach of contract claim are confusing for many business people as recovering does not necessarily mean recouping all losses claimed for a breach. the general principle under English contract law is that damages will be awarded for loss of profits but there are other possibilities.
In a recent case, rather than a claim for loss of profits, the claimant sought damages on the basis of loss of value to business on a franchise agreement, which was ended by the franchisor. This in turn obviously made the claimant's company less valuable.
Whilst on a commonsense view, the claim as detailed above made sense, the Judge in the case rejected this method of claim and stated that it was much too hypothetical. Had the claim been made instead on the basis of loss of profit, it would have succeeded. Alternatively, if the consequence of the breach of contract was that the claimant's whole business failed, then a different claim based on loss of value may have succeeded.
This case clearly highlights the technical nature of contract law and the need for good advice from experienced litigation solicitors. It also shows that when you make a claim, you should include different and alternative possible legal points so that if a Judge rejects one basis of argument you can still succeed on other arguments.
Please visit our litigation page or get in touch for further advice.