Matthew McCahearty & Jonathan Pratt applaud the flexibility of Wrotham Park damages
Damages for breach of contract are normally measured by reference to the innocent party’s financial loss; the intention being to put that party in the position it would have been in, had the contract been properly performed. When damages are calculated on that basis, a claimant who has not suffered a loss will only be entitled to nominal damages.
However, there is a growing line of authority which provides for damages to be assessed by reference to the price of a release from the obligation which the defendant has breached, following a hypothetical negotiation between a willing buyer and a willing seller. This measure of damages is often referred to as Wrotham Park damages after the case of Wrotham Park Estate Company Limited v Parkside Homes Limited [1974] 1 WLR 798.
In Pell Frischmann Engineering Ltd v Bow Valley Iran Ltd & Others (Rev 2) [2009] UKPC 45, the Privy Council awarded Wrotham Park damages for breach of a confidentiality agreement.
Case law
In Wrotham Park, the defendant built houses
