16. Compensatory remedies

This chapter considers compensatory damages, the primary remedy for breach of contract which an affected party can seek in English law. It first examines how the courts assess and award damages based on two approaches: expectation interest and reliance interest. In particular, it looks at the various measures of damages such as the loss of profit measure, the ‘cost of cure’ and ‘difference in value’ measures, loss of amenity and disappointed expectations, and the loss of chance measure. The chapter also discusses the various ways in which compensatory remedies can be limited in law by focusing on the principles of causation, mitigation, and remoteness. Finally, it evaluates the role damages play in contract law and suggests that English law gives the parties a good deal of freedom to design remedies, which parties can use when designing contracts.