Weilers LLP

Damages For Breach Of Contract

Damages For Breach Of Contract

June 27, 2024

By Nick Melchiorre 

What happens if a real estate deal falls apart because the seller refuses to close?

The prospective buyer may be entitled to damages for the loss of their bargain.


How are these damages measured?


The Ontario Court of Appeal reviews the principles of damages for breach of contract, including agreements for purchase and sale of real estate, in Preiano v. Cirillo.

The Cirillos agreed to sell their home for $480,000.00. The buyers, after the breach by the Cirillos, claimed specific performance and in the alternative, damages. They claimed that the market value of the home was $1 million more than the agreed price, relying upon appraisal evidence.

The trial judge rejected the claim for specific performance, and awarded damages based on the appraisal evidence. He assessed the damages as of the date of trial, which is the measure where specific performance might be awarded, but damages are substituted.

The Court of Appeal agreed that this was not a case for specific performance but disagreed with the damage award. They point out that absent special circumstances:

the ordinary measure of damages arising from a breach of an agreement of purchase and sale is the difference between the contract price of the property and the value of the property as at the date of the breach of the agreement of purchase and sale

(emphasis added)

The trial judge therefore was in error. In this case, the damages were not a replacement for specific performance at all, since that extraordinary remedy would not have been granted. They are simply damages for breach of contract- assessed as of the date of breach. Therefore, the market value had not increased as much as alleged. The appraiser had suggested a value of $550,000.00 as of the date of breach, and that reduces the damages to $70,000.00- a substantial difference.

The Court of Appeal also reviewed the issue of mitigation of damages – the obligation of a Plaintiff to take reasonable steps to reduce their loss. The onus is on the defendants to show a failure to mitigate, and in this case, they did not call evidence that a reasonable substitute was available at less than $550,000.00 at the time of breach. The defendants lost on this issue.


  • Understanding the law of remedies is tricky.
  • Damages are far more common than specific performance.
  • The law of damages is not always obvious.
  • Picking the correct date of assessment of damages is important.
  • Having good legal advice is important.



Our counsel, Brian Babcock, is a former lecturer on the law of remedies at the Bora Laskin Faculty of Law and has an ongoing interest in the topic, in particular specific performance. He provides this expertise as a member of our litigation team, consulting with all the lawyers in the group.

If you think this advantage will help you, give us a call. We may be the right lawyers for you.