LEGAL PRINCIPLE: DAMAGES AND REMEDIES – Distinction Between Contract and Tort – Measure of Damages Differs According to Nature of Claim
PRINCIPLE STATEMENT
Before a court can commence a meaningful assessment of damages, it must be sure of the nature of the claim, that is to say, whether the claim is in contract or in tort, and, if in tort, the nature of the wrong alleged... The principles guiding the award of damages in tort are different from those guiding the award of damages in contract. The object of tort damages is to put the plaintiff in the position he would have been in if the tort had not been committed, whereas, the object of contract damages is to put the plaintiff in the position he would have been in if the contract had been satisfactorily performed.
RATIO DECIDENDI (SOURCE)
Per Ayoola, JSC, in Agbanelo v. Union Bank of Nigeria Ltd. (2000) NLC-201997(SC) at p. 9; Paras B–C.
"Before a court can commence a meaningful assessment of damages, it must be sure of the nature of the claim, that is to say, whether the claim is in contract or in tort, and, if in tort, the nature of the wrong alleged... The principles guiding the award of damages in tort are different from those guiding the award of damages in contract. The object of tort damages is to put the plaintiff in the position he would have been in if the tort had not been committed, whereas, the object of contract damages is to put the plaintiff in the position he would have been in if the contract had been satisfactorily performed."
EXPLANATION / SCOPE
Damages assessment requires determining whether the claim sounds in contract or tort, as the measure differs. Tort damages aim to restore plaintiff to pre-tort position (restitution in integrum). Contract damages aim to place plaintiff in position as if contract were performed (expectation interest). Applying wrong measure leads to erroneous awards. Courts must first identify the cause of action’s nature before assessing damages. This ensures correct principles guide the award, achieving appropriate compensation aligned with the legal basis of liability.