Damages for Breach of Contract: Compensation, Restitution and Vindication

Abstract

In this article we examine the role which vindication plays in contract damages. Vindication describes the making good of a right by the award of an adequate remedy. We argue that, while the primary purpose of compensation is to provide an indemnity for loss, an award of compensatory damages will nevertheless generally vindicate the right to performance of the contract. We go on to consider a distinct measure of damages, vindicatory damages. These, we argue, are neither compensatory nor restitutionary, neither loss-based nor gain-based: they are a rights-based remedy. We then identify various situations in which the courts may be seen to have awarded what are, in substance, vindicatory damages. We conclude by considering the benefits which may follow from recognition of the availability of vindicatory damages as a contract remedy.