1. Pursuant to the terms of the agreement, Sixdion would market the defendant’s technologies to the federal government. The Court held that the trial judge further erred by failing to apply a discounted cash flow analysis as at the date of breach. Courts often put it like this (this is from a case from 1848): And the amount of compensation for the breach of contract is: Damages as a remedy is primaril… This is referred to as the expectation interest. As examples of such exceptions, the Court cited circumstances where no market exists to replace undelivered securities at the date of breach, or where the case involves certain classes of property whose value is subject to constant and unpredictable fluctuations. Shortly thereafter, Sixdion filed for bankruptcy. The New Brunswick Court of Appeal declined to measure the damages based on the cost of reinstatement, finding that awarding damages equivalent to the amount of remedying the breach would be unreasonable. An approach that assesses damages as at the end of the term of the contract or as at the date of trial is not permitted absent unique circumstances, which do not include the mere fact that a court is required to assess future loss. Bulls Eye's major out-of-pocket expenses related to the renovations made to the property and the supplies required for the restaurant's operation. When you entered into the contract, you expected a certain result. In its recent decision in Rougemount Capital Inc. v. Computer Associates International Inc., 2016 ONCA 847, the Court of Appeal for Ontario helpfully clarified that, absent special circumstances, the appropriate date to assess damages for breach of contract is as at the date of breach, and not at some future date (for example, the end of the contract term or the date of trial). A recent decision of the Ontario Superior Court illustrates that the traditional categories of damages available for breach of contract are becoming blurred and that the scope of recovery available to a plaintiff may be expanding. Compensatory damages are the most common remedy in cases of breach of contract. We believe that our success is a reflection of our clients' success. The Court first noted the “well established” rule that “the general measure of damages for breach of contract is the amount of damages that will, so far as money can, place the aggrieved party in the same position as if the wrong had not been done,” and that the “focus is on the injured party’s loss and on the measure of compensation required to restore it to the position that it would have been in had the contract been performed.”. To be recoverable, expectation damages for breach of contract: (1) must be reasonably foreseeable; (2) must be unavoidable in the sense that the Innocent Party is treated as if it had an obligation to take reasonable steps to avoid loss, that is to mitigate; and (3) must be proved with some certainty. In the case of a restaurant like Bulls Eye, the expectation interest would be the profit that it hoped to obtain over the term of the lease, either through the operation of the restaurant or by selling or franchising it. fact that as a result of breach of contract by Canada Life and its failure to make payments, Lyons's depression was aggravated. Receive updates by email. In your cause of action for breach of contract, you will be claiming either expectation, reliance, or restitution. The lawsuit revolves around the terms of an $18.9 million contract based on a tender won by IBM to retool the online licensing and registration system used by freight carriers and bus companies. The claim for punitive damages was advanced on the basis that Canada Life acted so inappropriately punitive damages were required. McCallum is also seeking payment for himself and the proposed Class for the payment they are owed under their Aviva insurance policies for the loss of business income. Kevin O’Brien, Lauren Harper. Legal action was commenced shortly thereafter. Conclusion. Some types of damages commonly issued in a breach of contract case include: Compensatory Damages. In a recent decision, the Superior Court of Quebec held that the termination of a fixed term contract of employment constitutes a breach of contract which may allow for an award of damages for “troubles and inconveniences” suffered by the employee, in addition to damages for early termination.. Author(s): This is referred to as the expectation interest. In the Sebastian case, that included damages (payable by Sebastian, the breaching buyer) reflecting a lower subsequent sale price ($75,000.00), extra financing charges ($32,940.93) and carrying costs … . In other cases, the damages can be significant. It was agreed by the parties’ experts that if damages were assessed as at the date of breach, it would be appropriate to apply a discount rate that reflected the rate venture capitalists would apply in valuing a business based purely on forecasts, where the business had no prior history of revenue. Intermediate term - a breach of a term that is neither a condition nor a warranty will only justify termination of the contract if the breach is sufficiently serious. In 2004, the defendant IT developer and manufacturer entered into an agreement with Sixdion Inc. (Sixdion), an IT marketing company. Calculations are usually straightforward as they are based on the contract itself or market values. Usually this type of remedy is intended to compensate the non-breaching party for losses suffered as the result of a contract breach. As found by the trial judge, even though the lease provided that Bulls Eye could not profit from subletting or assigning the lease, there were other options that would have been available to Bulls Eye to realize the value of the lease (but for the termination). If so, this case may signal a departure from the traditional rule that a plaintiff, faced with breach of contract, must elect to claim either its expectation or its reliance interest. Welcome news for plaintiffs, particularly where the nature of a contract breach 1.5... Would market the defendant breached … 1 expected a certain result “ impact ” or. Was commenced shortly thereafter ): Kevin O ’ Brien, Lauren Harper based the. 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