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Damages for Mental Distress and Other Intangible Loss in a Breach of Contract Action
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Introduction The general rule in contracts is that a plaintiff is not entitled to general damages for mental distress and other intangibles such as annoyance, humiliation, upset, disappointment, frustration, anguish, or anxiety in the face of breach. There are a number of reasons why this is so -- both practical and theory-driven. First, contract law has historically limited recovery for breach of contract to financial loss only. As the House of Lords recently stated in Johnson v. Gore Wood & Co., \"[c]ontract-breaking is treated as an incident of commercial life which players in the game are expected to meet with mental fortitude.\" For a distinct but related second reason, courts are wary of opening the floodgates of contractual damages tied to the plaintiff's emotional suffering. As Justice Newbury of the British Columbia Court of Appeal has observed, given that in almost every contractual scenario, the innocent party will experience some emotional upset in the face of breach, judicial parameters have been erected to limit successful claims in this area. Third, there is a concern over problems of proof and claim inflation. According to David Capper, \"[t]his reticence about compensating for intangible losses is sensible also because of the risk of claimants who have suffered no real damages harassing defendants by artificially inflating their damages and alleging all kinds of minor losses to which they are largely indifferent.\" Fourth, since many plaintiffs in commercial litigation are corporations, they are not capable of suffering mental ...
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- Date created
- 2005
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- Type of Item
- Article (Published)
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- License
- © 2005 Shannon O'Byrne. This version of this article is open access and can be downloaded and shared. The original author(s) and source must be cited.