As baron parke put it in robinson v harman 1848 154

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As Baron Parke put it in Robinson v Harman (1848) 154 ER 363 at 365 (in words approved by the High Court of Australia in Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64): Where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. Consequently, damages in contract can take into account any loss of profit that would have been earned had the contract been completed. Exemplary or punitive damages (which are awarded to punish a defendant — rather than to compensate a plaintiff) are not normally awarded in contract though some early move towards such awards can be detected in recent tortious decisions and also in some of the ‘travel’ cases. In those cases travellers have successfully sued for damages for discomfort, distress and disappointment when their holidays and tours have proved to be less than was promised. In Baltic Shipping v Dillon (1993) 176 CLR 344, for example, Mrs Dillon received $5,000 in damages for disappointment and distress when the cruise liner on which she was a passenger sank off New Zealand on the tenth day of a planned 14 day cruise. Developments in consumer legislation may also result in future damages going beyond the merely compensatory and including a punitive element.
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© Stephen Graw 2012 Damages can be pre-agreed Contracts can include a clause to the effect that, if they are breached, a specified amount will be paid as agreed damages. If that specified amount bears some direct relationship to the likely or anticipated loss the stipulation is called a liquidated damages clause . Such clauses are perfectly valid and the courts will enforce them. However, if the amount stipulated bears no relationship to the likely or anticipated loss but was inserted merely to terrify the other party into performance — by imposing an outrageous pecuniary penalty for any possible breach — the clause is called a penalty and the courts will not enforce it. This does not mean that in those cases the innocent party loses all rights to compensation. The court simply disregards the penalty clause and substitutes its own determination of what that party actually lost. 6.2.2 Other contractual remedies Specific performance A decree of specific performance is an order of the court directing a party to do what he or she is required to do under the contract. Specific performance is an equitable remedy and, as such, it is usually only available when an award of damages will not suffice to do justice. For example, if the contract is to buy and sell something unique no amount of damages will allow the buyer to acquire a similar item elsewhere; consequently, the seller in default may be ordered to specifically perform (ie go through with the sale).
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