The document discusses different types of damages in contract law including compensatory damages, liquidated damages, and penalties. It states that compensatory damages aim to put the injured party in the same position as if the contract had been performed, liquidated damages are a pre-estimate of damages from breach but can be penalties if unreasonable, and penalties will not be enforced by courts.

1. DAMAGES ‘ The object of an award of damages is to give the claimant compensation for the loss, the damage the injury he has suffered’ (McGregor on Damages) © 2010 Satelles Limited All Rights Reserved

2. MEASURE OF DAMAGES IN TORT AND CONTRACT (The principle of restitutio in integrum ) ‘ that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in had he not sustained the wrong for which he is now getting his compensation or reparation’ (Lord Blackburn in Livingstone v Rawyards Coal Co.) © 2010 Satelles Limited All Rights Reserved

3. DAMAGES IN THE LAW OF CONTRACT ‘ The rule is that the claimant is entitled to be placed, so far as money can do it, in the same position as he would have been in had the contract been performed’ (Parke B in Robinson v Harman) © 2010 Satelles Limited All Rights Reserved

4. THE NORMAL MEASURE OF DAMAGES IN CONTRACT ‘ If one party makes default in performing his side of the Contract, then the basic loss to the other party is the market value of the benefit of which he has been deprived through the breach. Put shortly, the claimant is entitled to compensation for the loss of his bargain’ (McGregor On Damages) © 2010 Satelles Limited All Rights Reserved

5. LIQUIDATED DAMAGES ‘ Where the parties to a contract, as part of the agreement between them, fix the amount which is to be paid by way of damages in the event of breach, a sum stipulated in this way is classed as liquidated damages where it is in the nature of a genuine pre-estimate of the damage which would probably arise from breach of the contract’ (Lord Dunedin in Dunlop Pneumatic Tyre Co v New Garage and Motor Co) © 2010 Satelles Limited All Rights Reserved

6. DISTINGUISHING LIQUIDATED DAMAGES AND PENALTIES ‘ It may be said to be a rule for distinguishing liquidated damges from penalties that one is a genuine pre-estimate of damage and the other a sum fixed in terrorem (as a threat)’ (Lord Dunedin in Dunlop Pneumatic Tyre Co v New Garage and Motor Co) © 2010 Satelles Limited All Rights Reserved

7. WHAT IF IT IS A PENALTY? ‘ The courts refuse to implement the intention of the Parties in the case of a penalty’ (McGregor On Damages) © 2010 Satelles Limited All Rights Reserved

8. HOW WILL I KNOW IF IT IS A PENALTY? ‘ A stipulated sum is a penalty if it is extravagant and unconscionable in comparison with the greatest loss that could conceivably be proved to have followed from the breach’ (Lord Dunedin in Dunlop Pneumatic Tyre Co v New Garage and Motor Co) © 2010 Satelles Limited All Rights Reserved

9. IT’S A PENALTY! ‘ Where the loss is reasonably calculable, at the time of contracting, if the loss accruing to the claimant from the breach in question can, at the time when the contract was made, be accurately or reasonably calculated in money, the fixing of a larger sum will prima facie be treated as a penalty’ (McGregor On Damages) © 2010 Satelles Limited All Rights Reserved

10. Progress in MEDIATION comes swiftly for those who try their hardest. (Pantanjali) © 2010 Satelles Limited All Rights Reserved FINAL WORD OF WISDOM…