The nature of damages in contract

Abstract

Lord Justice Atkin once remarked that the law of damages is 'a branch of the law on which one is less guided by authority laying down definite principles than on almost any other matter that one can consider'. When Professor Goodhart later made the same complaint he wondered why this should be so, but concluded that there were three fundamental reasons. First, the nature of the subject matter is such as to make it impossible to elicit a rule capable of doing absolute justice to all concerned. For no plaintiff is fully compensated for the breach unless he recovers for every item of loss which stems directly or indirectly, foreseeably or unforeseeably, from the breach. And yet, argued Goodhart, it would plainly be intolerable for any wrongdoer to be saddled with such extremes of liability. Second, until the basic theories of contract, or tort, are fully worked out, it will be impossible to develop consistent principles in the la of damages, which after all are only part of the major substantive body of rules. Take tort, he says, and the debate as to whether fault is or is not an essential ingredient of liability: