2. Expectation/Reliance Loss

Expectation Loss

To put the claimant in the position they would have been in had the contract been properly performed, damages are normally awarded for expectation loss. This could be claiming for the profit that would have been gained (Thompson v Robinson Gunmakers); the difference in value between the goods/services required in the contract and those actually provided (Bence Graphics International Ltd v Fasson UK Ltd); or loss of profits on other contracts due to breach (Victoria Laundry v Newman).

Reliance Loss

Where profit cannot be estimated, the claimant may claim for reliance loss – the expense incurred by a claimant who relied on a contract being performed (Anglia Television Ltd v Reed).

Causation

The claimant must prove that the breach caused the loss using the 'but for' test.

Remoteness of Damage

However, the damage must not be too remote – the claimant can make a claim if the loss was either reasonably foreseeable or the two parties had actual knowledge that this loss would occur (Hadley v Baxendale).