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The date-of-breach rule remains central to contractual damages, yet courts continue to recognise important exceptions: Ian Gascoigne explores the evolving case law
- Although contractual damages are usually assessed at the date of breach, courts may exceptionally take account of later events where ignoring them would overcompensate or undercompensate the innocent party.
- Recent cases show that post-breach events are most likely to affect damages in continuing contracts, anticipatory breach situations and share sale warranty claims, but the courts remain cautious about relying impermissibly on hindsight.
Every law student learns that the loss of the victim of a breach of contract is assessed at the date of the breach. It is a clear and certain rule that makes it easier for advisers of a victim to calculate how much their client should recover. It is certain, except there are exceptions. In some situations, in assessing loss a court can reflect in the level of compensation events which happen after breach of contract occurred. One reason for an exception is where the post-breach situation would make a fixed cut-off breach
