Editing Damages (section)

====Breach of contract duty - (ex contract)====
On a breach of contract by a defendant, a court generally awards the sum that would restore the injured party to the economic position they expected from performance of the promise or promises (known as an "[[Expectation damages|expectation measure]]" or "benefit-of-the-bargain" measure of damages). This rule, however, has attracted increasing scrutiny from Australian courts and legal commentators.<ref name="Tabcorp v Bowen Investments">{{cite AustLII|HCA|8|2009|litigants=Tabcorp Holdings Ltd v Bowen Investments Pty Ltd |courtname=auto }}.</ref><ref name="Clark v Macourt">{{cite AustLII|HCA|93|2013|litigants=Clark v Macourt |courtname=auto }}.</ref><ref>{{cite journal |first=David |last=Winterton |url=http://www.austlii.edu.au/au/journals/MelbULawRw/2014/27.html#fn4 |title=Clark v Macourt: Defective Sperm and Performance Substitutes in the High Court of Australia|journal=Melbourne University Law Review |year=2014 }} (2014) 38(2) Melbourne University Law Review 755.</ref> A judge arrives compensatory number by considering both the type of contract, and the loss incurred.<ref>{{Cite web|url=http://jec.unm.edu/education/online-training/contract-law-tutorial/remedies-for-breach-of-contract|title=Remedies for Breach of Contract — Judicial Education Center|website=jec.unm.edu|access-date=2020-04-13}}</ref>

When it is either not possible or not desirable to award the victim in that way, a court may award money damages designed to restore the injured party to the economic position they occupied at the time the contract was entered (known as the "[[Reliance damages (law)|reliance measure]]")<ref name="McRae v Commonwealth">{{cite AustLII|HCA|79|1951|litigants=[[McRae v Commonwealth Disposals Commission]] |parallelcite=[http://www.austlii.edu.au/au/cases/cth/HCA/1951/79.pdf (1951) 84 {{abbr|CLR|Commonwealth Law Reports}} 377] |courtname=auto }}.</ref><ref name="Commonwealth v Amann Aviation">{{cite AustLII|HCA|54|1991|litigants=[[Commonwealth v Amann Aviation]] |parallelcite=(1991) 174 [[Commonwealth Law Reports|CLR]] 64 |courtname=auto }}.</ref> or designed to prevent the breaching party from being unjustly enriched ("restitution") (see below).

Parties may contract for [[liquidated damages]] to be paid upon a breach of the contract by one of the parties. Under common law, a liquidated damages clause will not be enforced if the purpose of the term is solely to punish a breach (in this case it is termed [[penal damages]]).<ref name="Amev-Udc v Austin">{{cite AustLII|HCA|63|1986|litigants=Amev-Udc Finance Ltd v Austin |parallelcite=(1986) 162 [[Commonwealth Law Reports|CLR]] 170 |courtname=auto |date=4 November 1986}}.</ref> The clause will be enforceable if it involves a genuine attempt to quantify a loss in advance and is a good faith estimate of economic loss. Courts have ruled as excessive and invalidated damages which the parties contracted as liquidated, but which the court nonetheless found to be penal. To determine whether a clause is a liquidated damages clause or a penalty clause, it is necessary to consider:

{{Ordered list |list_style_type=lower-roman
|Whether the clause is 'extravagant, out of all proportion, exorbitant or unconscionable'<ref name="ACCC v Esanda">{{cite AustLII|FCA|1225|2003|litigants=Australian Competition & Consumer Commission v Esanda Finance Corporation Ltd |courtname=auto |date=7 November 2003}}.</ref>
|Whether there is a single sum stipulated for a number of different breaches, or individual sums for each breach<ref name="dunlop">{{cite BAILII|litigants=Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd |year=1915 |court=UKHL |num=1 |courtnaem=auto |date=26 April 1915 |parallelcite=[1915] [[Appeal Cases Law Reports|AC]] 847}}.</ref>
|Whether a genuine pre-estimate of damage is ascertainable<ref name="dunlop"/>}}