CONTRACT LAW — Damages — Breach of Contract — Measure of Damages Is Loss Flowing Naturally from Breach
Principle Statement
In an action for breach of contract, the measure of damages is the loss flowing naturally from the breach and incurred in direct consequence of the breach.
Ratio Decidendi (Source)
Per Edozie, JSC, in Gonzee Nig. Ltd v. Nigerian Educational Research and Development Council & Ors (2005) NLC-1402000(SC) at p. 10; Paras B–C.
"In an action for breach of contract, the measure of damages is the loss flowing naturally from the breach and is incurred in direct consequence of the breach: see Swiss Nigeria Wood Industries Ltd. v. Bogo (1970) 6 N.S.C.C. 235; Hadley v. Baxendale (1854) 9 Ex 341; Chukwumah v. Shell Petroleum (1993) 4 NWLR (Pt.289) 512 at 563; Agbanelo v. U.B.N. Ltd. (2000) 7 NWLR (Pt.666) 534 at 551."
Explanation / Scope
Damages for breach of contract compensate loss naturally flowing from the breach. The loss must be a direct consequence of the breach. The principle applies to contract law. The rule follows Hadley v. Baxendale’s first limb. The claimant need not prove special circumstances for natural, ordinary damages. Remoteness defeats recovery.
