What is meant by damage ?

The term damage in legal parlance refers to the loss or any form of injury or disadvantage caused to a particular individual through natural means, and accident or intentional actions with motives can be termed as damage.

Damages might be associated with other terms that are used in legal parlances like compensation or indemnity. Damages can be awarded to people in cases of loss suffered to property, medical malpractice, the loss suffered in income or any other legal violation. An essential feature of damages is tangibility, but even this feature might differ from case to case depending on the nature of the damage sustained.

the basic difference between the two terms compensation & damage  depends on the facts of the case, compensation is always fixed on basic principles under Sec. 73 of the Indian Contract Act, 1872 and damages are ascertained based on varying circumstances unique to the instance prevalent in a particular case.

Damage

1. The loss caused by one person to another or to his property, either with the design of injuring him, with negligence and carelessness, or by inevitable accident.
2. The loss which some one has sustained, and the gain which he has failed to make. e.g., by tempest, earthquake, or other natural cause, the loss must be borne by the owner.stances unique to the instance prevalent in a particular case.

Damages

1. 
   Financial compensation is awarded to someone who suffered an injury or was harmed by someone else’s wrongful act.
2. The indemnity is given by law and is to be recovered from a wrongdoer by the person who has sustained an injury, either in his person, property, or relative rights, in consequence of the acts of another.

Damages are given either for breaches of contracts or for tortious acts.

Damages for breach of contract may be given, for example, for the non-performance of a written or verbal agreement, or of a covenant to do or not to do a particular thing.

As to the measure of damages, the general rule is that the delinquent shall answer for all the injury which results from the immediate and direct breach of his agreement, but not from secondary and remote consequences.

Damages for tortious acts are given for acts against the person, such as an assault and battery against the reputation, e.g., libels and slander; against the property, e.g., trespass, when force is used; for the consequential acts of the tort-feasor, e.g., when a man, in consequence of building a dam on his own premises, overflows his neighbor’s land; against the relative rights of the party injured, e.g., for criminal conversation with his wife.

Damages for torts are either compensatory or vindictive.:

• Law grants damages by way of restitution or compensation and not by way of punishment. 
• Damages are awarded in terms of money.
• The injured party can claim damages through a court of law.
• Damage is not punishment but compensation for legal injury.
• Awarding damages is the common law remedy. 
• Damages include compensation & other losses. Sometimes interest also. 
• The object of damages for breach of contract is to put the injured party in the same financial position. This is also called the doctrine of restitution. 

Kinds of damages 

 1)   General or substantial or ordinary. 

2 )   Specific or particular damages

3 )    Vindictive or exemplary. Or punitive 

  4)    nominal damages.

General damages are those which arise naturally in the ordinary course of events from the breach of contract. 

These damages constitute the direct loss suffered by the injured party. 

These are paid for the proximate cause of breach of contract. 

Rule Of Hadley vs Baxendale evaluate.

It is recoverable from the promisor. 

Specific or particular damages

Damages that arise from unusual circumstances known to both the parties to the contract are called special damages. Parties responsible for the special losses they made were known to the other party at the time of the making of the contract.                                                                  

Vindictive or exemplary. Or punitive 

Punitive damages are awarded the intention of punishing the default action party for not doing the same in the future. These are quite heavy in amount. These are not ordinarily awarded for breach of contract.

Ex: breach of promise to marry 

dishonor of cheque.

Nominal damages or contemptuous damages 

These are quite small in amount 

These are neither compensatory nor punitive

 The measure of damages (principles regarding damages )

• The nature & extent of the injury.
• Whether the liability of the defendant is vicarious or not
• date of calculation 
• Cost of decree

           The relationship between the plaintiff and the defendant

• Actual loss date of calculation 
• Loss arising in the usual course of things 
• Same financial position 
• Duty to mitigate the loss
• Damage agreed upon in advance in case of breach
• Mental Pain & suffering
• Default in the payment of money 
• Difficulty in the calculation.

Types of damages 

1 ) Liquidated damages

2)   Unliquidated damages 

Liquidated damages ;(The sum is fixed in advance and written into the contract.)

Section 74 deals with liquidated damages, relating to stipulated damages. Thus, there has to be a breach of the contract In order for the plaintiff to claim damages. In cases where there may be a reasonable revocation of the contract without any breach of the terms of the contract, the claim for damages should not arise as there is no breach per se.

Liquidated damages, also referred to as liquidated and ascertained damages (LADs), are damages whose amount the parties designate during the formation of a Contract for the injured party to collect as compensation upon a specific breach (e.g. late performance). This is most applicable where the damages are intangible, such as a failure by the contractor on a public project to fulfill minority business subcontracting quotas.

The purpose of a liquidated damages clause is to increase certainty and avoid the legal costs of determining actual damages later if the contract is breached. Thus, they are most appropriate when (a) the parties can agree in advance on reasonable compensation for breach, but (b) the court would have a difficult time determining fair compensation at the time of the breach. Under the common law, liquidated damages may not be set so high that they are penalty clauses rather than fair compensation. Courts have no power to reduce or enhance the amount. these damages are t obe granted in full, irrespective of the extent of the loss.

Unliquidated damages

 Unliquidated damages are damages that are payable for a breach of contract, the exact amount of which has not been pre-agreed

Section 73 deals with actual damages resulting from infringement of the contract and the injury arising from such infringement which is in the nature of unliquidated damages since such damages are granted by the courts on the basis of an evaluation of the loss or injury caused to the party against which the infringement occurred.

In order to award unliquidated damages to the plaintiff, the court opts for a compensatory approach:

• Recover the loss incurred by the complainant
• Return the complainant to the position he had before the breach
• Minimize penalizing the respondent
• Avoid enhancing the complainant’s position over and above where it would have been if the breach did not take place

The money value of damage that has not been determined in the contract , it is paid in case of contract. 

The court decides the quantum of damages & compensation.

The damages, which can be fixed after the tortious liability arose, are called unliquidated damages.