October 23, 2023
You agree to purchase a condominium, but the vendor breaches the agreement.
What are you entitled to as damages?
The judge will not simply pick a number- there are rules and processes to be followed.
According to the Divisional Court in Nguyen v. Hu, in some situations, even where the condominium has increased in value, you might receive only nominal damages.
In the Nguyen decision, this was the result, even though Mr. Hu was found to have acted in bad faith in breaching the contract.
This happens because, generally, damages for the breach of contract are calculated as of the date of the breach, so the later increase in value does not help you or Mr. Nguyen.
Now, it is not an absolute rule that the damages have to be calculated as of the date of the breach, so what did Mr. Nguyen do wrong?
The damages should do justice to the innocent party.
How do courts measure that justice?
To use a different date, such as the date of trial, to assess damages, the innocent party must satisfy the court that the later date is the earliest date upon which they could have been expected to re-enter the market and mitigate or limit their loss.
Mr. Nguyen could have bought another condominium in the same project for the same price as he promised to pay Wu. There was no evidence that Mr. Nguyen lacked the money to do so.
He received “nominal” damages of $5,000.00. Since contract damages are seldom punitive, he received nothing further for his suffering at the hands of Mr. Wu.
We have written before about some of the difficulties in proving damages. Often, the Plaintiff and their lawyer are so focused on the liability issues that damages are an afterthought.
We know differently, as the Nguyen case once again illustrates.
In Nguyen, Wu did not advance the “date of breach” position until just prior to the motion for summary judgment. Nguyen (or his lawyer) declined the judge’s offer of an adjournment to better prepare. A tactical error, in hindsight? Damages were the only issue on the motion, so you might think that an adjournment could have helped, though Mr. Nguyen might have had good reason to think proceeding was a better idea.
Hindsight is always 20/20.
- Damages should not be the poor stepchild in your case.
- Calculating and proving damages may be complex, both factually and legally.
- If you are the innocent party, it is up to you to prove your damages.
- Preserving evidence and working closely with your lawyer will increase your chances of recovering something close to full compensation.
- The date of assessment and its cousin, the duty to mitigate, may be an important issue.
- A judge will not simply pick a number out of the air.
- If you fail to prove the amount of your loss, you might receive only nominal damages.
HOW WEILERS LLP CAN HELP YOU
The litigation team at Weilers LLP does not take damages for granted. We understand the law. We understand evidence. We also will give you sound advice to make solid tactical decisions so you avoid regrets in hindsight. If you want a lawyer who offers these skills, feel free to give us a call and see if we are the right lawyers for you.