CONTRACT LAW — Damages — Remoteness of Damage in Breach of Contract
Principle Statement
In breach of contract, a plaintiff is only entitled to damages naturally flowing from the breach. The measure is loss reasonably within parties' contemplation at contract time. There is no room for speculative or sentimental damages unless expressly provided.
Ratio Decidendi (Source)
Per Musdapher, JSC, in G. Chitex Industries Ltd v. Oceanic Bank Int'l (Nig.) Ltd (2005) NLC-1922000(SC) at p. 10; Paras A–C.
"In cases of breach of contract a plaintiff is only entitled to damages naturally flowing or resulting from the breach. … The measure of damages, in such cases of breach of contract, is in the terms of the loss which is reasonably within the contemplation of the parties at the time of contract. … When considering damages arising from a breach of a contract there is no room for damages which are merely speculative or sentimental unless these are specifically provided for by the express terms of the contract."
Explanation / Scope
Only damages naturally flowing from breach are recoverable. Contemplation of parties at contract time determines recoverable loss. The principle applies to contract damages. The rule excludes speculative, sentimental, or remote losses. Express contract terms may provide for otherwise unrecoverable damages. The claimant cannot recover for unforeseeable consequences.
