Damages based on breaching party’s gain


This case was an appeal to the Privy Council (PC) from the Jersey Court of Appeal so it carries a significant degree of authority. It concerned the level of damages which might be awarded in exceptional cases where little or no direct financial loss has been suffered. Ordinarily, damages are awarded to compensate the innocent party according to the amount of its financial loss. However, this case is a reminder that sometimes it is more appropriate for damages to be awarded on the basis of the benefit gained by the party in breach of contract.


P seemed to have secured exclusive negotiating rights for an oil field exploitation project with N. P then entered into confidentiality agreements with B and T as prospective members of a consortium to undertake the project. The agreements included provisions B and T would work exclusively with P and would not approach N without P's consent. The negotiations between P and N eventually collapsed. P, B and T began discussions as to buy-outs but no contract was concluded. P then lost the exclusivity with N and instead, B and T contracted directly with N. P issued proceedings against B and T alleging, amongst other things, breach of confidence.


points to note:

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