When is termination of a breached contract a prerequisite for the recovery of damages?
School of Business and Law
An important aspect of the study of breach of contract is that of the need for termination of the breached contract for the recovery of damages. It is suggested that the classification of damages, by describing them, variously, as being ‘expectation’, or ‘loss of bargain’, damages, or for anticipatory breach, gives limited guidance as to whether termination of the breached contract is a prerequisite for their recovery. This short article advances the discrete argument that in order to determine if termination of the breached contract is necessary for the recovery of damages, a practitioner’s enquiries could be more usefully focussed upon ascertaining whether the damages sought to be recovered are in respect of the consequences of the loss arising from the breaching party’s unperformed obligations, rather than adopting the criteria of ‘expectation’, or ‘loss of bargain’, losses, or for anticipatory breach, as the case may be.