Law of Damages (LPL4802)
University of south Africa
The law of damages is that part of the law which indicates how the existence and extent of
damage, as well as the proper amount of damages or satisfaction, are to be determined in the
case of delict, breach of contract or some other juristic fact providing for the payment of
damages (for instance, legislation or insurance),
This subject consists of four main parts
the general principles regarding damage and
compensation the measure of damages in the law of
contract
the measure of damages in the law of delict
certain procedural and other general
matters
When contracts are concluded and delicts are committed, the need to compensate damage is often
paramount, It follows that an infinite variety of persons may benefit from a working knowledge of
the legal principles expounded in this subject, Persons in the legal profession, insurance industry,
commerce, banking, advertising, medicine and accounting, are just a small number of those
persons who come to mind,
Damages
How damages are calculated
If you suffer injury, loss or damage as a result of someone else's action or
failure to act, you may claim damages or compensation from that person
(the defendant) if you can prove that he or she committed;
• A breach of contract; or
• A civil wrong (delict) such as personal injury or defamation, In delict,
the law imposes duties on everyone, whereas in contract the parties
themselves make their own rules, which are binding on them alone,
Generally, damages are aimed at putting you in the same position you
would have been in had the breach of contract or civil wrong not
occurred, Although most claims for damages are settled without the
case going to court, a settlement is usually negotiated on the basis of
what a court would be likely to award if it did have to make a ruling,
The measure of damages depends on the type of claim;
BREACH OF CONTRACT Damages for breach of contract, such as buying
and selling, are awarded on the principle that, through payment, the injured
party must be placed in the same financial position he or she would have
been in had the contract been properly performed,
INJURY Generally, damages for injury arising out of delict (civil wrong)
denote the difference between the present financial state of the plaintiff
and the state he or she would have been in had the delict not taken place,
The damages cover actual loss, probable future loss, and compensation for
pain and disability, (Seebreach of contract,)
,SUCCESS IS YOUR PORTION
DEFAMATION Where the plaintiff's personality has been impaired (as in
defamation), compensation damages may be awarded for the resultant insult,
indignity and suffering, (See defamation,)
General principles
Damages are awarded in one lump (monetary) sum; the court cannot order
periodic payments to be made, Furthermore, only one award can arise out of
a single cause of action, In a damages action, whether for breach of contract
or delict, you must claim
,damages for all damage resulting from the action, the onus being on you to
establish on a balance of probabilities both the extent of damage and the
amount of damages, This may require you to seek compensation not only
for loss already sustained, but also for prospective loss, even if the full
extent of your damage has not yet emerged when your case comes to court,
Give what evidence is available - and if you can assess your damages
financially, substantiate them, If, after giving evidence, you cannot
substantiate your claim, the court will assess the damages to the best of its
ability, Once damages have been assessed, you cannot claim further
compensation for subsequent loss arising from the same cause of action,
Mitigation (reduction) of damages
You cannot claim damages for loss you could have avoided had you taken
the steps a 'reasonable man' would have taken to mitigate (reduce)
damages, For example (in contract); if a hotel booking is cancelled, a
hotelier can claim for full loss only if it can be shown that reasonable
efforts were made to fill the vacant accommodation (unless the contract
provides otherwise), If the hotel was full anyway, the hotelier would have
no claim, because there would be no loss, Another example (in delict); if you
cannot continue working in a particular job because of a disabling injury
received through another person's negligence, you would be expected to
look for other employment if you are still capable of working, You cannot sit
back, do nothing and then claim the full loss of income, At the same time,
you do not have a 'duty' towards the defendant in this regard; the general
legal principle is that you cannot be the author of your own loss,
The defendant must prove that you could - and should - have reduced your
loss, If necessary, you can claim any expenses that you incur in taking
reasonable steps to minimise your damage,
Damages for breach of contract
In delict, the law imposes certain duties on everyone, whereas in contract
the parties themselves make their own rules, which are binding on them
alone, A party who fails to fulfil an undertaking may be ordered to pay
damages to the other party for breach of contract, An injured party is
entitled to be put in the position he or she would have been in had the
contract been properly carried out - whether or not the breach is serious
enough to justify cancelling the contract, The damages that can be
recovered in an action are the actual monetary loss (damnum emergens)
incurred and monetary profit (lucrum cessans) not made, (See breach of
contract),
Damages for fraud Two types of fraud can give rise to an action for damages;
• Fraud that does not lead to a contract, in which case you are entitled
to damages for financial loss;
• Fraud that induces a contract, In the above instance, you may rescind
the contract, especially if the fraud was 'causal', that is, you would
not have contracted at all had you known the truth, In such a case
you would be entitled to damages that would put you in the same
position that you would have been in had you not contracted at all -
the same rule as would apply to damages for delict, The amount of
damages you would receive if you kept your part of the contract has
not yet been cleared up by the courts, The following appears to be
the present state of the law; If the fraud was 'incidental' - in other
words, if it was of such a nature that you would still have contracted,
but on better terms, had you known the truth - you would be awarded
the loss caused by the fraud, You might be awarded damages even if
the value of the award exceeds what you gave, provided that you
would still have been better off had the fraud not taken place, If the
case is one of 'causal' fraud, you would obtain your financial loss as
damages, Normally this would be the difference in value between
, what you gave and what you received, but there could also be
consequential damages, For instance, if a farmer's cows were
infected by new cows bought from a dealer who
University of south Africa
The law of damages is that part of the law which indicates how the existence and extent of
damage, as well as the proper amount of damages or satisfaction, are to be determined in the
case of delict, breach of contract or some other juristic fact providing for the payment of
damages (for instance, legislation or insurance),
This subject consists of four main parts
the general principles regarding damage and
compensation the measure of damages in the law of
contract
the measure of damages in the law of delict
certain procedural and other general
matters
When contracts are concluded and delicts are committed, the need to compensate damage is often
paramount, It follows that an infinite variety of persons may benefit from a working knowledge of
the legal principles expounded in this subject, Persons in the legal profession, insurance industry,
commerce, banking, advertising, medicine and accounting, are just a small number of those
persons who come to mind,
Damages
How damages are calculated
If you suffer injury, loss or damage as a result of someone else's action or
failure to act, you may claim damages or compensation from that person
(the defendant) if you can prove that he or she committed;
• A breach of contract; or
• A civil wrong (delict) such as personal injury or defamation, In delict,
the law imposes duties on everyone, whereas in contract the parties
themselves make their own rules, which are binding on them alone,
Generally, damages are aimed at putting you in the same position you
would have been in had the breach of contract or civil wrong not
occurred, Although most claims for damages are settled without the
case going to court, a settlement is usually negotiated on the basis of
what a court would be likely to award if it did have to make a ruling,
The measure of damages depends on the type of claim;
BREACH OF CONTRACT Damages for breach of contract, such as buying
and selling, are awarded on the principle that, through payment, the injured
party must be placed in the same financial position he or she would have
been in had the contract been properly performed,
INJURY Generally, damages for injury arising out of delict (civil wrong)
denote the difference between the present financial state of the plaintiff
and the state he or she would have been in had the delict not taken place,
The damages cover actual loss, probable future loss, and compensation for
pain and disability, (Seebreach of contract,)
,SUCCESS IS YOUR PORTION
DEFAMATION Where the plaintiff's personality has been impaired (as in
defamation), compensation damages may be awarded for the resultant insult,
indignity and suffering, (See defamation,)
General principles
Damages are awarded in one lump (monetary) sum; the court cannot order
periodic payments to be made, Furthermore, only one award can arise out of
a single cause of action, In a damages action, whether for breach of contract
or delict, you must claim
,damages for all damage resulting from the action, the onus being on you to
establish on a balance of probabilities both the extent of damage and the
amount of damages, This may require you to seek compensation not only
for loss already sustained, but also for prospective loss, even if the full
extent of your damage has not yet emerged when your case comes to court,
Give what evidence is available - and if you can assess your damages
financially, substantiate them, If, after giving evidence, you cannot
substantiate your claim, the court will assess the damages to the best of its
ability, Once damages have been assessed, you cannot claim further
compensation for subsequent loss arising from the same cause of action,
Mitigation (reduction) of damages
You cannot claim damages for loss you could have avoided had you taken
the steps a 'reasonable man' would have taken to mitigate (reduce)
damages, For example (in contract); if a hotel booking is cancelled, a
hotelier can claim for full loss only if it can be shown that reasonable
efforts were made to fill the vacant accommodation (unless the contract
provides otherwise), If the hotel was full anyway, the hotelier would have
no claim, because there would be no loss, Another example (in delict); if you
cannot continue working in a particular job because of a disabling injury
received through another person's negligence, you would be expected to
look for other employment if you are still capable of working, You cannot sit
back, do nothing and then claim the full loss of income, At the same time,
you do not have a 'duty' towards the defendant in this regard; the general
legal principle is that you cannot be the author of your own loss,
The defendant must prove that you could - and should - have reduced your
loss, If necessary, you can claim any expenses that you incur in taking
reasonable steps to minimise your damage,
Damages for breach of contract
In delict, the law imposes certain duties on everyone, whereas in contract
the parties themselves make their own rules, which are binding on them
alone, A party who fails to fulfil an undertaking may be ordered to pay
damages to the other party for breach of contract, An injured party is
entitled to be put in the position he or she would have been in had the
contract been properly carried out - whether or not the breach is serious
enough to justify cancelling the contract, The damages that can be
recovered in an action are the actual monetary loss (damnum emergens)
incurred and monetary profit (lucrum cessans) not made, (See breach of
contract),
Damages for fraud Two types of fraud can give rise to an action for damages;
• Fraud that does not lead to a contract, in which case you are entitled
to damages for financial loss;
• Fraud that induces a contract, In the above instance, you may rescind
the contract, especially if the fraud was 'causal', that is, you would
not have contracted at all had you known the truth, In such a case
you would be entitled to damages that would put you in the same
position that you would have been in had you not contracted at all -
the same rule as would apply to damages for delict, The amount of
damages you would receive if you kept your part of the contract has
not yet been cleared up by the courts, The following appears to be
the present state of the law; If the fraud was 'incidental' - in other
words, if it was of such a nature that you would still have contracted,
but on better terms, had you known the truth - you would be awarded
the loss caused by the fraud, You might be awarded damages even if
the value of the award exceeds what you gave, provided that you
would still have been better off had the fraud not taken place, If the
case is one of 'causal' fraud, you would obtain your financial loss as
damages, Normally this would be the difference in value between
, what you gave and what you received, but there could also be
consequential damages, For instance, if a farmer's cows were
infected by new cows bought from a dealer who
