CONTRACT LAW ā Damages ā Recovery Must Not Amount to Double Compensation
Principle Statement
The plaintiff's actual loss was the extra N66,000.00 paid to remit US$12,000.00 to overseas suppliers. Awarding a staggering sum of N3.5 million in addition to the actual loss would be exploitative and unjustifiable. To sustain such award would amount to double compensation.
Ratio Decidendi (Source)
Per Oguntade, JSC, in G. Chitex Industries Ltd v. Oceanic Bank Int'l (Nig.) Ltd (2005) NLC-1922000(SC) at p. 19; Paras CāD.
"The ascertained loss of the plaintiff was the extra N66,000.00 it paid to get the sum of US$12,000.00 remitted to its overseas suppliers. To have awarded to plaintiff a staggering sum of N3.5m. in addition to the actual loss of N66,000.00 sustained is in my view exploitative and unjustifiable. ā¦ To sustain the award would have amounted to double compensation."
Explanation / Scope
Damages must compensate actual loss, not provide windfall or double recovery. Awarding excessive sums beyond proven loss is exploitative. The principle applies to contract damages. The rule prevents unjust enrichment through litigation. Recovery is limited to making the claimant whole. Double compensation occurs when a claimant receives more than actual loss suffered.
