Damages for breach of contract: FAQs What are damages and how are they calculated? This article considers the relevant principles under English law and looks at key shipping issues and case law. Articles Marcia Perucca Published: May 29, 2025 Contact author Download article pdf Key Navigation What are damages? What is the measure of damages for early termination of a charter? Are all types of losses recoverable in damages? Are events that happen after the breach taken into account when assessing damages? How can causation be established? What is the measure of damages for late redelivery of a vessel? How about remoteness? Is the loss of a follow-on fixture recoverable? What are consequential damages? What are liquidated damages? What about mitigation? Are there any other recent decisions to be aware of? At what date is the quantification of damages to be made? Can the parties exclude or limit the right to damages? What are damages? Damages are the monetary compensation awarded to the innocent party following a breach of contract by the other party. In contract, the aim of damages is to put the innocent party in the position they would have been in had the contract been performed as agreed ( Robinson v Harman ( 1848) 1 Ex 850). This is referred to as the compensatory principle. The nature of damages for breach of contract was explained by Lord Reed in Morris-Garner v One Step (Support) Ltd [2018] UKSC 20 as follows: “ Damages for breach of contract are…a substitute for performance. That is why they are generally regarded as an adequate remedy. The courts will not prevent self-interested breaches of contract where the interests of the innocent party can be adequately protected by an award of damages. Nor will the courts award damages designed to deprive the contract breaker of any profit he may have made as a consequence of his failure in performance. Their function is confined to enforcing either the primary obligation to perform, or the contract breaker’s secondary